Indonesia To Import Record Levels of Gasoline in 2023

Indonesia, Asia's largest importer of gasoline, may set new records this year as the country recovers from COVID-related travel restrictions, though growth is expected to slow slightly along with the economy.

An increase in Indonesian imports would tighten the regional gasoline market and likely boost Asian refinery margins. It could also accelerate plans to add methanol and ethanol to gasoline in order to reduce reliance on foreign supplies, a biofuel initiative that would complement the country's already widespread use of biodiesel.

According to the consultancy Rystad Energy, Indonesia's gasoline consumption will reach an all-time high of 670,000 barrels per day (bpd) in 2023, up from a record 635,000 bpd in 2022.

"Post-COVID recovery is the main driver behind the growth of gasoline demand," said Sofia Guidi Di Sante, a senior oil markets analyst at Rystad Energy.

"We have factored in a milder growth rate due to the plausible repercussions of a potential global recession."

According to Wood Mackenzie, Indonesia's gasoline imports surpassed pre-pandemic levels last year, reaching 380,000 bpd, a record high based on data dating back to 2010. According to WoodMac, this could increase to 390,000 to 400,000 bpd this year.

According to Refinitiv Oil Research, imports will be around 15 million tonnes (345,000 bpd) in 2022, up from around 11.5 million tonnes in 2021.

"Demand is still expected to be robust with (Indonesia's) strong economic growth and mobility," said Ranice Tan, a research analyst at WoodMac.

"However, growth is expected to slow down due to several fuel price increases last year (to contain ballooning subsidies) and potential recessionary effects."

Indonesia raised subsidised fuel prices by about 30% in early September as the government sought to reduce rising budget costs.

Nonetheless, government subsidies, which account for roughly half of the retail price of gasoline, have softened the blow of skyrocketing energy prices for consumers, according to Tan.

This year, the government has increased the amount of subsidised gasoline available for distribution.

According to estimates from Indonesia's downstream oil and gas regulator BPH Migas, sales of subsidised gasoline will reach 29.81 million kl (513,700 bpd) in 2022, said Saleh Abdurrahman, a committee member at the regulator.

According to a statement, BPH Migas has allocated 32.56 million kl of subsidised gasoline for distribution this year.