TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
RI must build new oil refineries: Minister
Fuel security: Finance Minister Bambang Brodjonegoro says that too long has passed since Indonesia built any oil refineries
Change Size
Fuel security: Finance Minister Bambang Brodjonegoro says that too long has passed since Indonesia built any oil refineries. (Antara) (Antara)
Fuel security: Finance Minister Bambang Brodjonegoro says that too long has passed since Indonesia built any oil refineries. (Antara)
Finance Minister Bambang Brodjonegoro has said that Indonesia must build new oil refineries to process and store domestic oil reserves so that the country's deficit in the oil and gas sector could be pushed down.
'We must make a commitment and agree that Indonesia needs [new] refineries,' he said as quoted by Antara in a dialogue entitled 'The National Energy Policy 2050' in Jakarta on Thursday.
Bambang said many oil refineries in Indonesia were old and some of them, such as Balongan, had been in operation for around 20 years. There has been no new refinery built for a while, he continued, so Indonesia must expand its oil reserve capacity soon.
'For 20 years, we have not built any new refineries,' said the minister, who is also a National Energy Council member.
Bambang said Indonesia was experiencing a deficit in the oil and gas sector due to the importation of crude and refined oil, such as standard fuel, or gasoline. Overall in the oil and gas sector, Indonesia recorded an import-export trade balance thanks to natural gas exports.
'One factor that determines our amount of surplus is how well we control our deficit not only in crude oil but refined oil, namely BBM [fuel],' he said.
The minister further explained that the government could not control crude oil trading, so the one measure it could take was to reduce deficit from importing gasoline. He said developing new oil refineries would be the government's effort to reduce the deficit caused by fuel imports.
'If we don't build new refineries, our fuel deficit will just get bigger,' said Bambang.
Indonesia recorded a US$1.33 billion trade surplus in July 2015, which was triggered by a $2.2 billion surplus in the country's non-oil-and-gas trade balance, the Central Statistics Agency (BPS) revealed in August. This was despite the oil and gas sector contributing a $870 million deficit that month.
Bambang said new oil refineries would also be important for supporting Indonesia's energy resilience to avoid it depending entirely on imports for its fuel needs. As the people's economy continues to improve, Indonesia is likely to have higher fuel demands. 'Do we want to always depend on imports or start to build our own capacity,' said the minister.
He said the government must involve the private sector to help finance the development of new oil refineries. He acknowledged, however, that private entities wanted to be certain that there would be buyers for their products, and declared that the government must be able to guarantee that oil refinery developers would provide private investors with certain buyers so that they would not have difficulty marketing their products. (ebf)(++++)
