MOSCOW (MRC) -- Indonesia's Pertamina is likely to keep planned import volumes in August tepid on the back of sluggish demand, adding further downside pressure to an already lackluster Asian gasoline market, industry sources told S&P Global Platts in the week that began July 19, said S&P Global.
Pertamina's August gasoline import volumes are pegged in the range of 5-6 million barrels, according to market participants, within the previously planned range in July, sources said. The muted import volumes come even as Indonesian domestic gasoline consumption witnessed an uptrend following the easing of large scale social restrictions, or PSBB, early-June.
The acting general manager of Pertamina MOR IV, Rahman Pramono Wibowo, said in a statement that the "average fuel consumption of gasoline in early July [has] increased by 20%, where daily consumption is currently at 2,100 kiloliters [per day]." The average daily consumption of gasoline was higher than May's average of 1,750 kilo liters/day, the statement added.
In May, as the country remained in PSBB, Indonesia's gasoline imports fell to 5.929 million barrels, the lowest since Platts started tracking the country's gasoline import volumes in 2013. The uptick in gasoline consumption mirrors increased activity, with driving across Indonesia recorded at 13% below baseline levels in the week ended July 12, in contrast to April's low of 70% below baseline levels, mobility data from Apple showed.
But with the import volumes for August far from the normal range of around 10 million barrels, sources remained bearish over supply-demand fundamentals. "It [the import volumes] is really very bad," a Singapore-based source said.
In 2019, Indonesia -- Southeast Asia's largest buyer of gasoline -- imported an average of 10.294 million barrels per month, according to data from Statistic Indonesia. Another source echoing similar views said "their Pertamina'] domestic refineries are still running. With the lower [gasoline] consumption rates, it seems unlikely that they Indonesia will come out to buy."
"Pertamina has been discharging cargoes at the end of the month. We saw this in June and it will happen in July again. For them [Pertamina] to come out on spot market they have to finish using these gasoline that is going into their tanks," a third source said.
With muted buying from Indonesia, supply-side pressures due to increased gasoline cargoes from China will continue to weigh in the near term, added market participants.
As MRC informed before, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.
Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.
We remind that in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.
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