Market participants expected that Pertamina’s planned import volumes in August would remain low due to sluggish fuel demand in Indonesia. Market sources said that Pertamina’s August gasoline import volumes would likely range between 5 million and 6 million barrels, similar to the previously planned volume in July. Indonesia’s gasoline imports fell to a 7-year low of 5.929 million barrels in May when the country was under social distancing measures.
The expectations came despite an uptrend in Indonesia’s fuel consumption. According to a Pertamina official, the average gasoline consumption has increased to 2,100 kiloliters/day in early July from 1,750 kiloliters/day in May. The rising gasoline use reflects increased driving activity in the country. Mobility data from Apple showed that driving activity increased from 70% below baseline levels in April to 13% below baseline in the week through July 12.
However, market participants remained bearish over supply-demand fundamentals. One of them said Pertamina would be unlikely to make higher purchases as domestic gasoline demand stayed low and the company needed to work through its gasoline stockpiles. Indonesia bought an average of 10.294 million barrels per month of gasoline last year.
Subdued buying appetite from Southeast Asia’s largest gasoline importer and more gasoline cargoes from China are expected to increase supply pressure in the near term. China is estimated to increase gasoline exports from approximately 356,000 bpd in June to about 421,000 bpd in July. As a result, the FOB Singapore crack of 92 RON gasoline versus Brent crude futures fell from an average of $2.17/barrel last month to $1.87/barrel so far this month.
