Indonesia to use more of its own oil

The government is planning to reduce crude oil exports by up to 110,000 barrels per day (bpd) in order to increase supply to domestic refineries, an energy ministry official said. The move will automatically cut crude oil imports for refineries and is therefore expected to reduce the cost of producing fuel at home.

Last year Indonesian refineries processed about 998,000 bpd of crude oil, of which 404,500 bpd was imported and the rest was domestic crude, he said. Over the same period total domestic oil output amounted to 1.096 mln bpd, of which 488,700 bpd was exported, he said.

Although a member of the Organization of Petroleum Exporting Countries (OPEC), Indonesia has been a net oil importer so far this year due to lack of investment in tapping new reserves. Lowering fuel production costs will help the government reduce its fuel subsidy spending amid rising world oil prices. The government estimates this year's subsidy spending to swell to 138.6 trln rupiah [USD $13.5 billion], almost twice its previous forecast of 76.5 trln [USD $7.4 billion].

- Wonder why they bother to export 400+ kbpd and then import another 400+ kbpd, if they skip it they can just use it for their own use. Sure they might lose out on some foreign exchange, but they would need to spend that foreign exchange to buy it back again from the open market right?

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