Indonesian Pertamina studies the risks of importing Russian crude

A worker sits with a street vendor as he waits for customers at a gas station of state-owned Pertamina in Jakarta, Indonesia August 22, 2022. REUTERS/Ajeng Dinar Ulfiana

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JAKARTA, Aug 25 (Reuters) – Indonesian energy firm PT Kilang Pertamina Internasional is examining the risks it could face if it bought crude oil from Russia, its chief executive said on Thursday, amid rising demand energy and an increase in the subsidy bill.

Indonesia has already tripled its subsidy budget to 502 trillion rupees ($33.87 billion) to keep prices of some subsidized fuels, electricity tariffs and liquefied petroleum gas unchanged, but growing demand and high global crude prices could push the bill even higher.

The government is currently considering policy options for subsidized fuel prices and a number of lawmakers this week called for imports of cheaper Russian crude oil. Read more

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“In this regard, we are assessing the risks and their mitigations,” said Taufik Adityawarman, managing director of PT Kilang Pertamina internasional, the refining subsidiary of state-owned energy company PT Pertamina.

He gave no further details.

Tourism Minister Sandiaga Uno, in a video posted on his Instagram account over the weekend, said Indonesia had been offered Russian crude at a 30% discount, adding that President Joko Widodo was considering it but that there were concerns about the sanctions.

Foreign Ministry spokesman Teuku Faizasyah told reporters on Thursday that it was a business-to-business issue, but authorities were working to secure energy supplies.

“On the government side, within the framework of economic diplomacy, we are doing everything we can to ensure that we can facilitate domestic energy needs through the various diplomatic missions that we carry out,” he said.

Earlier this year, Pertamina’s chief executive said that with the upgrade of its Balongan refinery, the company would now be able to process Russian crude. Read more

($1 = 14,820.0000 rupees)

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Reporting by Bernadette Christina Munthe, Fransiska Nangoy; Editing by Kirsten Donovan

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