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Pertamina still ‛studying’ plan to import Russian oil

The acting corporate secretary of PT Pertamina Patra Niaga, a Pertamina subsidiary, confirmed on Thursday that the company had yet to import crude oil from Russia, adding that the plan was still being studied.

Dio Suhenda (The Jakarta Post)
Jakarta
Fri, April 8, 2022 Published on Apr. 8, 2022 Published on 2022-04-08T00:04:15+07:00

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tate-owned oil and gas company Pertamina has said it was still studying a plan to import crude oil from Russia amid international pressure aimed at Moscow and the need for the government to protect its budget from soaring international energy prices.

Irto Ginting, the acting corporate secretary of PT Pertamina Patra Niaga, a Pertamina subsidiary, confirmed on Thursday that the company had yet to import crude oil from Russia, adding that it was still studying the estimated cost and the amount of Russian crude oil it would import.

Pertamina president director Nicke Widyawati said last week that the state-owned company had approached several Russian crude oil sellers to buy crude for testing at Pertamina’s refineries, adding that she had consulted with the Foreign Ministry and Bank Indonesia (BI) regarding the plan.

Nicke told lawmakers in a hearing on March 28 that Pertamina saw an opportunity to import oil from Russia “at a good price” amid geopolitical tensions, referring to the Russia’s invasion of Ukraine.

Read also: Pertamina turns to Russia for oil amid energy price hike

She said Pertamina would only deal with Russian companies that were not facing sanctions, adding that it had discussed payment arrangements, which may go through India.

When asked about Pertamina’s plan, Foreign Ministry spokesperson Teuku Faizasyah pointed out that European countries were still buying Russian oil amid economic sanctions aimed at Moscow.

“Apart from the [imposed] sanctions, [Russia’s] business interactions are still ongoing even with European countries, for example in gas [import],” Teuku said on Thursday.

European Union countries have been unable to agree on banning the import of Russian oil and gas. Germany, which relies on Russian gas for much of its energy needs, said that while it supported ending Russian energy imports as soon as possible, it could not do it overnight, Reuters reported.

Read also: Ukraine seeks 'ruinous' sanctions on Russia as Europe hesitates

Meanwhile, EU member Hungary said it was prepared to meet a Russian request to pay rubles for its gas, breaking ranks with the rest of the bloc and highlighting Europe’s reliance on imports that have held it back from a tougher response on Russia.

Pertamina’s move came as the government faces pressure to adjust its energy subsidy policy following the hike of international crude oil price, which was driven by global economic recovery, as well as the Russo-Ukrainian war.

On the other hand, the government is also set to consolidate its fiscal position, which includes reinstating a budget deficit cap of 3 percent of gross domestic product (GDP) by 2023, after adopting expansive fiscal postures over the past two years in response to the COVID-19 pandemic.

So far, Pertamina has raised prices for nonsubsidized fuels, namely Pertamax Turbo, Dexlite, Pertamina Dex, as well as Pertamax.

Coordinating Maritime and Investment Affairs Minister Luhut Pandjaitan said last week that the government planned to gradually raise the prices of subsidized Pertalite brand of gasoline and 3-kilogram liquefied petroleum gas (LPG) in the coming months.

Activists have called on Pertamina to scrap its plan of importing Russian crude, calling such a move to be unethical amid the ongoing armed conflict in Ukraine.

“[Russia] is the aggressor here; if we buy their oil, we will indirectly fund their invasion [of Ukraine]. The United Nations, President Joko “Jokowi” Widodo have all condemned the war. How could [Pertamina] be considering buying Russian oil?” said Greenpeace Indonesia head Leonard Simanjuntak.

Leonard’s comment came after Greenpeace activists briefly blocked the Seaoath ship from approaching the Pertamina Prime oil tanker situated off the coast of Denmark on March 31, temporarily preventing the transfer of some 100,000 tons of Russian crude oil. The Danish police disbanded the blockade on April 1, AFP reported.

The tanker was hired by Transfigura, a Singapore-based company, to bring Russian oil to China, an anonymous source from Pertamina said as quoted by BenarNews.com. The source said the contract to purchase the oil had been signed before the Russia-Ukraine war, adding that after the activists' protest was disbanded by the authorities, the tanker continued its journey to China.

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