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Widyawati told the committee that average daily gasoline and diesel sales had shrunk by 20% compared to pre-pandemic levels, while daily fuel sales had dropped 24% this month. The executive called on the government to stop granting import permits to other companies while Pertamina’s diesel stockpiles were “in excess”.
In an April 22 update to the company’s fuel storage levels, Widyawati said average national demand had fallen by 34.9% across every one of the company’s product lines.
“The option to export can increase income even though the [market value] is not at its best condition,” En Tempo quoted Widyawati as saying.
Pertmaina is looking to export jet fuel, demand for which has tumbled 45%, and stockpiles of which are now estimated to cover 91 days’ worth of demand. China is seen as one potential target market, with one cargo of jet fuel having already been exported on April 21. Nicke said diesel supplies amounted to 2.05mn kilolitres, 1.48mn kl of octane-88 gasoline and 1.2mn kl of octane-92 gasoline.
Pertamina’s decision to scale back its upstream operations comes as a direct reversal of the company’s position early last month, when it declared that the oil price collapse would not derail its drilling programme. Upstream direc- tor Dharmawan Samsu said at the start of March that the company’s recently announced drilling expansion plans for this year would proceed.
PetroVietnam unable to stockpile cheap oil
PROJECTS & COMPANIES
STATE-OWNED PetroVietnam has said that it is unable to capitalise on low international crude oil prices owing to limited storage capacity.
“There is no national (crude oil reserve) storage, except for the storages of the two oil refineries owned by Binh Son Refining and Pet- rochemicals and Nghi Son Refinery and Petro- chemical,” Reuters quoted the company as saying on April 22.
It added that budget constraints would pre- vent it from hiring crude oil tankers to act as floating storage facilities. PetroVietnam had told the newswire on March 18 that it was con- sidering buying oil to stockpile while prices were so low.
Between the coronavirus (COVID-19) pandemic and the oil price war between Saudi Arabia and Russia, international benchmarks have fallen to historic lows. The US’ West Texas Intermediate (WTI) benchmark col- lapsed into negative territory earlier this week, hitting -$37.63 per barrel, while Brent almost neared $25 per barrel.
The world’s oil storages have filled up fast as supply has raced ahead of demand, driving up prices for oil tankers as floating storage. Barrons
reported this week that day rates for oil tank- ers had climbed from a “normal” average of $35,000-40,000 to $150,000 per day on the spot market. Longer-term pricing is hovering around $80,000-100,000 per day.
The situation prompted PetroVietnam to call on the government earlier this week to stop fuel and oil imports amid rising domestic inventory. PetroVietnam’s Binh Son Refining and Petro- chemical said fuel imports accounted for 35% of domestic demand in the first quarter.
The major called on the government on April 20 to lift value added tax (VAT) on oil product exports so it can competitively export its inven- tory. Domestic fuel demand slumped 30% year on year in the first quarter.
An official of the Domestic Market Depart- ment under the trade ministry said that the current low oil prices would benefit Vietnamese importers, adding that PetroVietnam’s proposal was being considered.
VN Express quoted an unnamed trade min- istry official as saying that while the current low oil price environment benefited Vietnamese importers, the ministry would consider Petro- Vietnam’s proposal.
Week 16 23•April•2020 w w w . N E W S B A S E . c o m P9
