Singapore — Indonesia's crude oil imports fell sharply in June, taking only half the volume of imports it had received in the prior month, highlighting Jakarta's growing efforts to slash its import bill amid prolonged weakness in the rupiah.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
Indonesia imported 833,630 mt of crude in June, 48.8% lower than the 1.63 million mt received in May, detailed figures from Indonesia Statistics showed last week.
On a quarterly basis, crude imports fell 3.9% to 3.93 million mt between April-June, from 4.09 million mt in the January-March quarter.
With the steep depreciation of the rupiah hurting the country's purchasing power in the international oil markets, Indonesia's state-run Pertamina has recently been focusing on using more domestic crude. Accordingly, Indonesia's crude exports fell 12.1% month on month to 832,675 mt in June. Q2 exports dropped to 2.33 million mt, from 2.46 million mt in Q1.
Southeast Asia's biggest energy consumer has been actively retrieving various domestic field operatorships from foreign upstream companies this year, signaling Jakarta's desire to make the most of domestic oil, and minimize its crude import bill, S&P Global Platts reported earlier.
The availability of Indonesian light sweet crude and condensates have been declining sharply after Pertamina took full control of the Mahakam production block early this year.
Among Indonesia's key export grades, Senipah condensate, Bontang condensate, Handil Mix and Attaka crude could dissipate from the Asian spot market as majority of the output would be processed by state-run Pertamina's domestic refineries, industry and market sources have said.
As for condensates, imports had recovered to 91,518 mt from May's multi-year low of 42,655 mt, but the Q2 volume stood at 292,326 mt, 53.6% below the 630,478 mt imported in Q1.
Although Indonesia remains one of the biggest oil producers in Southeast Asia, the weak domestic currency and rising dollar-denominated international crude prices do not bode well for the economy's balance sheet as it is also the biggest energy consumer in the region, turning to a net crude importer in 2012, fixed-income market analysts said.
The US dollar/rupiah exchange rate surged above Rupiah 14,700 last week, the pair's highest level since September 29, 2015, up by more than 8% from Rupiah 13,542 at the start of the year.
--Sue Koh, firstname.lastname@example.org
--Gawoon Philip Vahn, Philip.Vahn@spglobal.com
--Edited by Norazlina Juma'at, email@example.com