Indonesia Aims to Reduce Trade Balance Deficit with Domestic Oil Refinery Development

Indonesian Economic Minister Hatta Rajasa has highlighted the importance of developing domestic oil refineries to reduce the country's trade balance deficit, particularly in the oil and gas sector. With a reported trade balance deficit of $128.7 million in July 2010, largely attributed to the oil and gas sector, Hatta emphasized the need for domestic refineries to fulfill domestic demand and reduce fuel oil imports. The minister has outlined a roadmap for building refineries in regions such as East Java, with existing plans including the medium-term agenda to establish refineries in multiple locations.

Key Takeaways:

• The Indonesian Economic Minister, Hatta Rajasa, has identified the need to develop domestic oil refineries to meet the country's increasing fuel oil demand and reduce trade balance deficits.
• The oil and gas sector contributed significantly to the country's trade balance deficit of $128.7 million in July 2010.
• Despite a surplus of $9.46 billion cumulatively during the January-July period, Hatta expressed concern over the high import figures in the oil and gas sector.
• Hatta plans to analyze and discuss the trade balance data with the trade minister to identify areas for improvement in the non-oil sector.
• The government's assumed inflation rate for 2010 was 5.3%, but the actual rate in August was 4.8%, with Hatta stating that the team remains optimistic that the inflation rate will remain within a range of 5% ± 1% for 2010.

Statistics:

• Indonesia's trade balance deficit in July 2010: $128.7 million
• Cumulative trade balance surplus during the January-July period: $9.46 billion
• Assumed inflation rate for 2010: 5.3%
• Actual inflation rate in August 2010: 4.8%
• Crude petroleum being exported from Indonesia and subsequently imported as fuel oil to meet domestic demand

Sources:

• "Indonesian Economic Minister: Building Oil Refineries Needed to Fulfill Domestic Demand" - Asia Pulse, Sept 6
• "Trade Balance Deficit Widened in July" - ANTARA, 2010
• "Indonesia's Trade Balance Data" - Central Bureau of Statistics (BPS)