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Jakarta Post

Consumption keeps growing as energy infrastructure worsens

  • Hanan Nugroho

Jakarta   /   Mon, July 14 2008   /  10:08 am

While domestic demand for oil is escalating uncontrollably (12 percent for gasoline and 15 percent for diesel fuel in 2007) and domestic oil production has been on a continuous slide for the last 13 years, it is sad to find that oil prices are skyrocketing and our energy infrastructure is deteriorating. What will happen next? Oil refinery capacity in Indonesia has not expanded since Balongan EXOR (West Java) started operating in the mid 1990s. The total capacity is stuck at 1.055 million bpd, even decreasing since Pangkalan Brandan was shut down recently. Except EXOR, all the refineries are old, most of them having started operation before the 1980s (Sei Pakning in 1957, Plaju in 1930 by Shell). Four out of nine refineries (about one-third of national capacity) are located in Sumatra, far from the middle and eastern islanders who also need oil. Geographical const...