Pertamina gasoil imports to fall 37.5 percent in February

SINGAPORE: Indonesian state energy firm Pertamina is expected to import about 3 million barrels of high sulphur gasoil in February, a volume that is more than a third lower than this month, a source familiar with the matter said on Wednesday.

The reduction is likely due to higher gasoil prices and its 120,000 barrels per day (bpd) Dumai refinery in central Sumatra returning from maintenance, traders said.

Benchmark gasoil prices rose near a two-month high on Tuesday on a rally in underlying crude prices.

Lower requirements from Indonesia will help to ease the tight high-sulphur gasoil market in Asia, where supply is struggling to keep pace with demand as refineries switch to cleaner fuel.

It could also reduce premiums for high sulphur gasoil as Pertamina is one of the biggest importers of the product in Asia, traders said.

Premiums for the 0.5 percent sulphur gasoil, which is used for blending purposes to meet Indonesia's 0.35 percent sulphur gasoil, have been above 60 cents a barrel to benchmark Singapore quotes since the start of the year, compared with a discount of 15 cents to parity to Singapore quotes for the same period last year, Reuters data showed.

Pertamina usually imports about 4-5 million barrels of gasoil every month, from both the spot and term market.

For January, the company is expected to import about 4.8 million barrels.

Pertamina's February gasoil requirements are also less than for the same period last year, when it forecast imports of about 4 to 4.8 million barrels.

"I don't think less imports from Pertamina is reflective of lower demand in the country," a Singapore-based trader familiar with the Indonesian market said. "It could be due to the higher flat prices right now. They can always import in the spot market when prices fall, or increase overall requirements in March."

Pertamina's Dumai refinery, which has two hydrocracker units of 27,000 bpd each producing diesel and kerosene, is also back from a planned maintenance which started in November, which could be another reason for the decline in imports, traders added.