Indonesia's state-owned oil and gas entity Pertamina has lined up gasoline term imports of 8.9 million-9.1 million barrels for May, down from total imports of 9.48 million-9.68 million barrels in April, trade sources said this week.
Of the planned imports for May, 8.5 million barrels are 88 RON gasoline and the other 400,000-600,000 barrels comprise 92 RON gasoline of High Octane Mogas Component specifications.
In comparison, it is importing around 9 million barrels of 88 RON gasoline and 480,000-680,000 barrels of HOMC-specs 92 RON gasoline for April, of which 80,000 barrels of the HOMC-specs 92 RON gasoline were bought on a spot basis.
The reason behind Pertamina's lower imports in May could not be immediately confirmed. Traders however, said the reduction likely meant the company is carrying over inventories from its earlier purchases.
Pertamina have already scaled back its April gasoline imports from estimates of 10.5 million barrels in March, given that its overall imports in March was sharply bolstered by spot buying of up to 1 million barrels for end-February to March by its trading arm Petral, following a brief outage at its 125,000 b/d Balongan refinery in February.
Meanwhile, the decline in term allocations by Asia's single largest gasoline importer has weighed down sentiments in the regional markets that is already under pressure from prospects of rising supplies once Asia comes out of its refinery turnaround next month.
Asian benchmark Mean of Platts Singapore 92 RON gasoline crack to front-month ICE Brent futures fell to a four-month low last week to be assessed at $4.66/barrel on April 11, Platts data shows. The crack was last lower on December 14 when it was assessed at $4.24/b.
While cracks have since rebounded, to be assessed at $7.46/b Wednesday, it is still 51% lower from its last high of $15.38/b on February 25.
Looking ahead, traders will be watching Indonesia's latest effort to rein-in subsidy spending through plans to raise the pump price of the heavily subsidized 88 RON gasoline for private car owners to Rupiah 6,500-7,000/liter (67-72 cents/liter), Platts reported previously.
The government however, is likely to maintain the current subsidized fuel price of Rupiah 4,500/liter for 88 RON gasoline and diesel for motorcycles and public transport, energy and mines minister Jero Wacik told a news conference last Friday.
The government subsidizes 88 RON gasoline, 0.35% sulfur diesel and kerosene. The fuels that are not subsidized include 92 RON and 95 RON gasoline.