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Pertamina to supply 60 percent Indonesia oil production, Indonesia to refund $1.3 billion

Staff Writer |
Government targetted 60 percent of national oil production from PT Pertamina (Persero).

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Commisioner of Pertamina Sahala Lumbangaol mentioned, this will encourage Pertamina’s downstream business and bring Pertamina to be Indonesia’s biggest oil producer.

“Pertamina is an integrated oil company, from upstream to downstream. Pertamina will move on and keep developing like development of petrochemical based on coal,” said Lumbangaol in Pertamina Energy Forum 2018, at Raffles Hotel, Jakarta, Wednesday, November 28th, 2018.

A research and consultant company, Wood Mackenzie predicted stable crude oil price for the next 18-24 months. The stagnant price is considering bigger supply reduction from Iran over United State’s sanction. But on the other hand, oil supply from US will be increasing.

“We expected that oil price to remain stable for at least in the next 18 months,” said Wood Mackenzie Asia Pacific Upstream Oil & Gas Research Director, Andrew Harwood, in Pertamina Energy Forum 2018 held in Raffles Hotel, Jakarta, November 28th.

Indonesia's government will compensate state energy firm Pertamina up to $1.3 billion for fuel sales costs in 2017 in addition to subsidies, for keeping domestic prices steady, a senior Pertamina official said on

ednesday. Indonesian President Joko Widodo has promised to freeze some consumer fuel and electricity prices ahead of national elections in 2019, despite climbing global oil prices and the rupiah's depreciation.

Widodo raised subsidies for diesel fuel fourfold to 2,000 rupiah ($0.1377) a litre this year to keep prices unchanged, but made Pertamina shoulder the losses of keeping prices of RON 88 gasoline steady.

Under the president's order, Pertamina must also sell fuel at the same prices across the country, which meant more costs for the company.

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