TEMPO.CO, Jakarta - The Downstream Oil and Gas Regulatory Agency (BPH Migas) is discussing the plan to add oil reserves for national energy security. Based on their review, Indonesia needs Rp30 trillion to meet the required reserves crude and fuel oil reserves.
"Our study revealed [the need for] Rp1 trillion per day. If we are to add reserves by 30 days, it means we need Rp30 trillion," BPH Migas chief Fanshurullah Asa told Tempo on Monday, February 26.
According to Fanshurullah, the fund would be used to buy 48 barrels of oil reserves to meet the fuel consumption demand of 1.6 million bpd.
He said that the Rp30 trillion is actually not enough, as the ideal stock for national oil reserves is 90 days.
Based on BPH Migas's review, there are three options to procure oil reserves. The first if for the government to directly buy oil using the state budget, which Fanshurullah said is rather unlikely due to budget restraints.
The second option is to mandate commercial fuel trade entities to build storage infrastructure and provide up to 30 days of reserves. According to Fanshurullah, this second option could raise fuel prices, as infrastructure development will be calculated as an investment cost that must be returned every year.
The last option is to have Pertamina work and establish partnerships with overseas oil suppliers. BPH Migas plans to discuss this option with Pertamina and the National Energy Board (DEN). "That way, the state will not have to spend money—but still able to use stocks," Fanshurullah said.
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