Pertamina: Fuel Demand Drops as Supply Swells amid Pandemic

TEMPO.CO, Jakarta - State-owned energy firm Pertamina reported an abundance of fuel supply due to the significant drop in market demand amid the coronavirus pandemic. The company is also reportedly seeking to export its products to improve the market absorption rate. 

Pertamina president director Nicke Widyawati said the average national fuel demand had dropped 34.9 percent across every product variation the company sells. Out of all the decrease in demand, jet fuel or avtur saw the most significant decrease with a 45 percent drop in daily average sales. 

“The option to export can increase income even though the [market value] is not at its best condition,” said Nicke on April 22. 

She said the company is pursuing to export avtur to reduce the current supply that is expected to last up to 91 days. China is seen as one of the target markets with one cargo of jet fuel that has been exported to the country up to Wednesday. 

Pertamina also reports an abundance of diesel fuel supply after the government imposed coronavirus social distancing measures that dropped the average fuel consumption. Nicke stated that the supply of diesel fuel (solar) currently amounts to 2.05 million kiloliters or worth 33-day supply. 

Responding to this situation, Institute for Development of Economics and Finance (Indef) researcher Abra Tallatov argues that Pertamina’s export plan is a favorable market absorption plan for the jet fuel market as China’s market will potentially need the supply to serve commercial flights as the coronavirus is starting to show signs of subsiding. 

VINDRY FLORENTIN