Indonesia bought about 12.4 million barrels of oil products for April, down 7 percent from this month, and industry sources said on Monday higher domestic prices had not dampened demand in a big way. The imports for April, which included 88- and 92-octane gasoline, 0.5 percent sulphur gas oil, jet A-1, kerosene and fuel oil, were down 1 million barrels from the 13.42 million barrels of products that state oil firm Pertamina took in March.
Traders said the decline in imports was partly due to the restart of Pertamina's 60,000-barrel-per-day (bpd) crude unit at its Balikpapan refinery in early March.
Overall demand in Indonesia remains steady, despite a rise in fuel prices from March 1, they said.
"Diesel demand is down a bit in Indonesia after the price hike. Automotive and industrial demand has been affected slightly," a Jakarta-based trader said.
Indonesia's diesel imports steadied in April after falling nearly 10 percent in March from the previous month.
Its March and April imports have been estimated at 6.0 million barrels (about 200,000 bpd) a month, compared with 6.6 million barrels (235,700 bpd) bought in February.
"But an import volume of 6.0 million barrels is still quite all right in terms of demand," another trader said.
Traders have kept a close eye on fuel imports in Indonesia after the government decided to slash oil subsidies, which had been draining state coffers.
The price hikes, which included a 27.3 percent rise in automotive diesel fuel price and a 33.3 percent increase for industrial diesel, are expected to amount to savings of 20.3 trillion rupiah ($2.1 billion) for the government.
Analysts said the subsidy cuts would not eliminate demand growth.
"Price increases in those economies where oil products are subsidised should set the stage for slower demand growth in 2005 amidst continued gains in international markets. However, subsidy cuts alone will not bring demand growth to a halt," Eurasia Group's Antoine Halff said in a report.
He said further economic expansion in Southeast Asia, driven by US and Chinese import demand, would continue to support oil consumption growth during 2005, albeit at a slower pace.
Pertamina purchased 240,000 barrels of jet A-1 for April, while its kerosene imports were steady from March at 1.18 million barrels.
Details of the 92-octane purchase were sketchy, but traders estimated Pertamina had bought 800,000 to 1 million barrels for April, down from the 1.28 million barrels bought for March.
"Gasoline demand is still very strong. Import volumes are much higher than a year ago," said a trader with a Chinese firm.
Imports of 88-octane gasoline slipped 200,000 barrels to 3.2 million barrels, sources said.
Pertamina also cut its fuel oil purchases by 400,000 barrels to 800,000 barrels for April.
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