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Jakarta Post

Indonesia to save $200m by cutting marine fuel oil imports

  • Stefanno Reinard Sulaiman

    The Jakarta Post

Jakarta   /   Thu, February 14, 2019   /   03:03 pm
Indonesia to save $200m by cutting marine fuel oil imports Deputy Energy and Mineral Resources Minister Arcandra Tahar (Antara/Akbar Nugroho Gumay)

The government has estimated the country will save US$200 million a year by cutting marine fuel oil (MFO) imports after four private companies agreed to purchase the commodity from state-owned oil and gas holding company Pertamina, instead of importing it.

The four companies are publicly listed nickel miner PT Vale Indonesia, local fuel trader PT AKR Corporindo, fuel producer PT Cosmic Petroleum Nusantara and Batam, Riau Islands,-based fuel trader PT Yavindo Sumber Persada.

“Vale will start [to buy MFO from Pertamina] from April as their previous contract [for MFO imports] ends in March,” Deputy Energy and Mineral Resources Minister Arcandra Tahar said in Jakarta on Wednesday, adding that Pertamina’s MFO supply was sufficient.

Based on the ministry’s data, Pertamina produced 1.9 million kilo liters (kl) of MFO in 2018, while the annual volume of MFO imports from the four companies was around 400,000 kl annually and worth US$200 million.

Arcandra claimed that the measure would benefit both Pertamina and those four companies as the latter would get a cheaper MFO price than the imported MFO.

“They had opted to import MFO [rather than buying from Pertamina], because previously there were hassles in the form of tenders and so on. Now we've resolved it by mediating the process.” he explained. (bbn)