As the country recovers from COVID-related travel restrictions, Indonesia, Asia's largest importer of gasoline, may set records for gasoline consumption and imports this year. However, growth is anticipated to moderate along with the country's economy.
Increased imports from Indonesia would make the regional gasoline market more competitive and probably increase the fuel's profits at Asian refineries. In order to decrease its dependency on imports, it might potentially expedite plans to add methanol and ethanol to gasoline, a biofuel project that would complement the nation's already widespread use of biodiesel.
As per consultant Rystad Energy, Indonesia's gasoline consumption will reach a record 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."
As shown by consulting firm Wood Mackenzie, based on data going back to 2010, Indonesia's gasoline imports last year exceeded pre-pandemic levels at 380,000 bpd, a record high. According to WoodMac, this might increase to 390,000 to 400,000 bpd this year.
In comparison to 2021, Refinitiv Oil Research predicted that imports would increase to approximately 15 million tonnes (345,000 bpd) in 2022.
"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."
Early in September, Indonesia increased subsidised fuel prices by roughly 30% in an effort to contain rising budgetary costs.
However, government subsidies, which account for nearly 50% of gasoline's retail price, Tan added, have lessened the impact of soaring energy prices for consumers.
Additionally, the government has raised the amount of gasoline distributed at a subsidised rate this year.
Estimates from Indonesia's downstream oil and gas regulator BPH Migas place sales of subsidised gasoline at 29.81 million kl (513,700 bpd) in 2022, according to Saleh Abdurrahman, a committee member of the regulator.
BPH Migas announced in a statement that it had allotted 32.56 million litres of subsidised gasoline for distribution this year.