After three years with a negative balance of trade, Indonesia recorded a trade surplus in 2015 due to a decreasing oil and gas deficit and an increased non-oil and gas trade surplus compared to the previous year, the Central Statistics Agency'€™s (BPS) latest data shows.

The BPS data reveals that Indonesia recorded a trade surplus of US$7.52 billion in 2015 after suffering a deficit of $1.88 billion in 2014. Meanwhile, Indonesia'€™s oil and gas deficit reduced to $6.05 billion in 2015, from $13.13 billion the previous year. At the same time, the country'€™s non-oil and gas surplus increased to $13.57 billion in 2015, from $11.24 billion the previous year.

The improved data, however, was caused by Indonesia'€™s worsening economy and oil prices decreasing due to oversupply and did not reflect an improved export performance, an economist has warned.

Institute for Development of Economics and Finance economist Berly Martawardaya said that by volume in 2015, Indonesia had imported more gas and crude oil than in 2014, increasing by 16.35 percent and 15.70 percent respectively, although refined oil imports decreased by 12.65 percent.

"The slump in oil prices has cut Indonesia'€™s oil and gas deficit. With an additional 10 million new motorbikes and one million cars in 2015, it is hard for us to cut oil and gas consumption," Berly told thejakartapost.com on Sunday.

The economist further said Indonesia'€™s weak economy had aggravated the situation as people had cut their imports spending as a result.

According to BPS data, Indonesia'€™s average price payed for imported oil and gas decreased by 42.39 percent in 2015. Meanwhile, the price decrease of exported oil and gas was slightly lower, at 38.44 percent. The non-oil and gas commodities showed lower decreases also, of 6.80 percent for imports and 4.48 percent for exports.

Berly further explained that Indonesia'€™s weak business in 2015 was evident from a 21.4 percent decrease in raw material imports and a 15.6 percent decrease in capital goods imports.

Despite a quite significant 42.39 percent decrease in prices, the analyst said Indonesia'€™s oil and gas export volume had increased by 7.56 percent in 2015, which meant that the country was selling more oil at the cheaper price, especially crude oil. The volume of crude oil exports increased by 24.92 percent from 2014.

Studies show that Indonesia'€™s oil is mostly exported due to refinery problems, with most going to Singapore refineries and the refined oil being imported back to Indonesia. Despite improved capacity at several local refineries, the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) has found that would likely be difficult for Indonesia to shift its crude oil export allocation over to domestic use due to problems related to international business structures.

"We asked [US-based] Chevron to sell oil from their Minas and Banyu Urip fields directly to Pertamina without exporting it first. They actually agreed but could not implement it because they had to sell their oil through Chevron Trading, which is located not in Indonesia, but in Singapore. Similar problems also restrict other multinational oil companies," SKKMigas head Amien Sunaryadi said. (ebf)

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