Indonesia's government is considering setting its energy subsidies at 186.9 trillion rupiah ($11.9bn) in 2024 to maintain its citizens' purchasing power, said the Ministry of Energy and Mineral Resources (ESDM) this week.
Out of the Rp186.9 trillion, Rp113.3 trillion will go towards fuel oil and LPG and Rp73.6 trillion for electricity subsidies, ESDM minister Arifin Tasrif said.There will likely be an increase in prices and demand for crude oil, he added.
The 2024 subsidy target is 17pc higher than the Rp159.6 trillion in subsidies for 2023, out of which Rp95.6 trillion went to the fuel and LPG sector, followed by Rp64 trillion to the electricity sector. Subsidies in 2023 were lower than the Rp174.4 trillion in subsidies in 2022.
Indonesia — the biggest gasoline buyer in the Asia-Pacific — imported an average of 356,000 b/d of gasoline during January-October 2023, according to GTT data. It is likely to increase its gasoline imports in the first quarter of this year, with the presidential election in February and higher driving demand during the Islamic fasting month of Ramadan, which lasts a month from early March.
Opec expects oil demand to continue growing, it said on 17 January. It projects demand growing by 2.25mn b/d this year, with demand growth then slowing to 1.85mn b/d in 2025.
But the IEA expects record-high oil supplies this year, it said on 18 January, leaving an overhang of 500,000 b/d as demand growth slows. It expects demand to grow by 1.24mn b/d in 2024, lower than Opec estimates, to 103mn b/d. The IEA forecasts supplies to grow by 1.5mn b/d in 2024 to 103.5mn b/d, driven by record-breaking output from the US, Brazil, Guyana and Canada.
The Ice front-month March Brent contract was at $79.29/bl at 09:00 GMT, up by 0.3pc from its last settlement. The front-month February WTI crude contract was at $74.38/bl, up by around 0.4pc.
