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Expert expresses doubt over projected oil, gas demand growth
The government’s oil and gas industry regulator sees strong growth in fuel consumption but views a global shift to renewable energy as a key challenge to upstream investment.
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An oil and gas rig operated by Saka Energi Muriah Limited is seen in this undated photo at the Kepodang Field of the Muriah Block in Central Java. (SKK Migas/SKK Migas.)
The Upstream Oil and Gas Special Regulatory Taskforce (SKK Migas) has projected a significant increase in domestic oil and gas consumption over the next decades, but whether this will happen depends largely on the transportation sector.
Institute for Energy Economics and Financial Analysis (IEEFA) analyst Elrika Hamdi said whether oil consumption would rise in the long run depended on the government’s ability to transform Indonesia’s transportation system.
Given that the lion’s share of oil consumption comes from the transportation sector and a transition to new and renewable energy is underway, this sector should strongly affect future oil demand.
“Oil and gas forecasts are [...] volatile and depend on growing demand,” Elrika told The Jakarta Post on Friday.
Should the planned electrification of transportation make fast progress, she added, there would be no significant increase in oil consumption.
In 2018, the transportation sector in ASEAN consumed 141 million tons of oil equivalent, almost the same amount as the total energy consumed by Indonesia, according to data from the ASEAN Center for Energy (ACE).
