Jakarta, CNBC Indonesia – The war between Russia and Ukraine will have a major impact on the world economy, and Indonesia is no exception. One of the commodities that will be affected is world oil.
The price of Brent crude oil set a new record since 2014, breaking down to the level of US $ 105 per barrel on Thursday (24/2/2022) following the Russian military attack on Ukraine. This rising world oil price, how about domestic energy security?
Member of the National Energy Council (DEN), Satya Widya Yudha explained, with the deficit in domestic oil and gas production, the increase in world oil prices will hit state finances. Even though the government is currently spurring investment in the oil and gas sector.
“We hope that the increase in oil prices will not continue to be high, because it will affect energy security,” Satya explained to CNBC Indonesia, quoted on Sunday (27/2/2022).
Indonesia since 2004 until now is still dependent on imports of Mineral Fuel (BBM) and crude oil for domestic needs.
From the national fuel consumption of 1.4 million barrels per day to 1.5 million barrels per day, Indonesia’s oil production capacity is only able to reach 700,000 barrels per day.
According to the Deputy for Planning of SKK Migas Benny Lubiantara, if the target can be achieved plus the energy transition, Indonesia will still experience a deficit of 500,000 barrels of oil that must be imported.
“Let’s say that in 2030 we can achieve production of 1 million barrels per day assuming there is an energy transition, there is no growth in oil consumption, we still have a deficit of over 500,000 barrels which we inevitably have to import,” he said in the 2022 Energy Outlook held by CNBC. Indonesia on Thursday (24/2/2022).
The intensity of the war that is still heating up between Russia and Ukraine has triggered the price of crude oil to be at a higher level. Considering that Russia supplies 10% of the world’s oil, its production will determine the balance of global oil supply and demand.
On the other hand, the Ministry of Energy and Mineral Resources (ESDM) revealed that the domestic demand for fuel oil (BBM) only lasts for 21 days.
The government must ensure that the supply of fuel and crude oil is not disrupted in the next few months.
Nevertheless, the Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Tutuka Ariadji, asked the public not to worry, because currently PT Pertamina (Persero) is claimed to have high flexibility in importing from many countries for fuel needs.
“So that in anticipating conditions like this, we can be better and adaptive to world tension conditions,” said Tutuka.
Pertamina’s Vice President of Corporate Communication, Fajriyah Usman, explained that Pertamina continues to monitor global energy conditions that affect the company’s business, in order to ensure national energy security is guaranteed, including the supply of fuel and LPG.
According to him, Pertamina is consistent in maintaining upstream to downstream operational performance to improve energy security and maintain supply stability for national consumption needs.
Currently, Pertamina has various sources of supply of crude oil, BBM and LPG products, both from within the country and from many other countries so that it has supply flexibility.
“Therefore, Pertamina will continue to monitor developments in the world oil and gas market and conduct studies, evaluate and coordinate with all stakeholders regarding its strategic impact, including the determination of non-subsidized fuel prices, in order to maintain a balanced market condition and ensure the company’s financial capacity in order to guarantee supply. BBM to all people to remote parts of the country,” he said.
Similarly, the business world is also worried that oil supplies will stagnate due to the Russo-Ukrainian war. Another impact is the uncontrollable price increase.
“What we need to watch out for is the movement of world oil prices, because it will affect our oil prices, at least the government needs to adjust or provide subsidies, this is what the government needs to anticipate because no matter what energy source oil is needed,” he told CNBC Indonesia, Friday (25/25). 2/22).
The large amount of oil production makes the Russo-Ukrainian war have a big influence on price changes. However, Sarman has not been able to estimate how much the potential increase will be in the future. It will be determined by the current state of war.
“Depending on the constellation that develops, entrepreneurs hope that the war will end quickly, because we are still in the pandemic season, the resolution of the war is no less important because it affects the global impact, the movement of world oil depends on the constellation that occurs. If this is prolonged, it can have a big impact,” he explained.
(Hi Hi)
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