Oil and fuels trade to remain in deficit
Alfian , The Jakarta Post , Jakarta | Mon, 07/28/2008 12:07 PM | Business
Due to low domestic output and spiraling consumption, Indonesia’s oil and fuels trade balance has remained in the red throughout the first semester of 2008 and is estimated to continue at a deficit for the rest of the year, an analyst said Saturday.
Economist Faisal Basri of the University of Indonesia (UI) said the deficit stood at US$5.5 billion as of the end of May as oil and fuel imports reached $13 billion and exports $7.56 billion.
"We are heading toward a very critical situation if we don’t formulate a proper energy policy. The deficit is predicted to be $15 billion at the end of this year" Faisal said Saturday at a discussion on the energy crisis held by UI.
The big gap between the fuels import and export shows the country has poor production but massive consumption, Faisal said.
Inefficiencies at state oil and gas company Pertamina and state power firm PT PLN have contributed significantly to the wide gap between imports and exports, Faisal said.
To mention an example, Faisal said "Pertamina’s cost recovery in 2007 was $36.1 per barrel, while Chevron’s was only $6.8 per barrel."
"Apparently, PLN uses more expensive primary energy in its energy consumption. About 30 percent of the company’s primary energy sources for electricity come from fuels and this accounts for about 70 percent of PLN’s total spending on energy sources," he added.
Indonesia needs to develop alternative energy sources as well as implement energy saving measures, Faisal said.
Also speaking at the discussion were UI’s professor of electrical engineering Rinaldy Dalimi, sociologist Paulus Wirutomo and senior journalist Ninok Leksono.
Rinaldy said the energy crisis had little to do with resources shortages, "Our energy policy has been wrong since the start. We have exported oil since the 60s because our oil is expensive.
"At the same time, we import oil from Saudi Arabia to be processed as fuels. As a result, even until today our refineries cannot process our own oil," Rinaldy said.
http://www.thejakartapost.com/news/2008/07/28/oil-and-fuels-trade-remain-deficit.html
