Pertamina’s oil product imports to surge 42 percent in July
Tuesday, June 28 2005 - 01:25 AM WIB
Pertamina’s imports will surge 42 percent in July versus this month’s 7.56 million barrels, taking purchases to the highest level in three months, industry sources said on Monday.
The increase follows weekend news that Pertamina, whose cashflow problems forced it to scale back imports sharply in June, had received Rp 9.3 trillion (nearly $1 billion) from the government to cover a fuel-subsidy reimbursement.
"I think we can safely say that the Indonesians are back in the market," a Singapore-based trader told Reuters. "The volume is quite comparable though still somewhat less than what they bought before they had the cashflow problems."
Pertamina cut back imports to just 250,000 barrels per day (bpd) in June, nearly 200,000 bpd less than a March peak, as its cash flow was squeezed by the widening gap between record crude oil prices and low, state-set retail prices.
OPEC member Indonesia is forced to import oil products as its domestic refineries do not produce enough fuel to satisfy demand.
The refiner, Asia's largest buyer of diesel, bought 7.36 million barrels of middle-distillates for July, up 40.5 percent from June and the highest monthly total since April.
That included 5.8 million barrels of gas oil, 1.2 million barrels of kerosene and 363,000 barrels of jet fuel.
The refiner also bought 3 million barrels of gasoline, up from 1.9 million barrels in June, including 2.4 million barrels of 88-octane and 600,000 barrels of 92-octane, the sources said.
"I think they got the money pretty late in the month and there were some prompt requirements that they could not fulfil despite issuing tenders for them several times," said the trader.
Pertamina had to cancel tenders for two 92-octane cargoes because suppliers were unable to meet the delivery dates.
The two cargoes, a 200,000-barrel parcel for July 1-3 delivery to Balikpapan and a 100,000-barrel lot for July 4 -6 delivery to Dumai, are expected to be retendered.
The refiner also bought two 140-centistoke fuel oil cargoes, totalling 370,000 barrels, for July 15-19 and July 23-27 loading from Singapore.
The purchases came after Pertamina President Director Widya Purnama said the company will boost its oil products stock to 18.5 days of demand from the existing 17.2 days by the end of June. The company aims to have stocks to meet 22 days of demand.
However, the purchases are still short of the refiner's stated purchase volume of 11.4 million barrels for July.
On Saturday, Indonesia's Finance Ministry announced that it had paid $963.5 million to Pertamina to cover fuel subsidies for May and for 2003 still owed to the company.
A Pertamina official said earlier this month that a more steady cash flow should be established once parliament passes a new budget, nearly doubling the amount set aside for subsidies. That is expected to happen later this week.
The Indonesian rupiah has been pressured by heavy dollar buying by Pertamina to pay for oil imports. The refiner buys an average of about $800 million a month to finance its imports.
The rupiah was trading at 9,660 per dollar on Monday after falling to a three-year low of 9,800 in April.(*)