Pertamina, the state oil and gas firm of Indonesia, is considering importing oil products from the United States amid the trade and tariff negotiations, Argus reported on Monday.
Indonesia seeks to show the United States that it is working to reduce its trade surplus with America and pledges to buy more U.S. products, especially energy, to reduce its trade surplus.
Last week, Indonesia’s Energy Minister Bahlil Lahadalia urged Pertamina to import American fuel regardless of the logistical challenges, Jakarta Globe reported.
“There is no excuse [to not import from the US]. We have already imported liquefied petroleum gas [LPG] from the US,” Lahadalia was quoted as saying.
Fuel imports from the U.S. would take about 40 days for a cargo to arrive in Indonesia, compared to a week or two for imports from Asia and the Middle East.
However, Indonesian authorities appear intent to avoid the steep ‘reciprocal’ U.S. tariff – currently suspended – which President Donald Trump slapped on Asian countries in early April.
Earlier this month, Lahadalia said that Indonesia plans to slash its fuel imports from Singapore and source more refined products from the United States as the country looks to negotiate lower tariffs with the U.S.
Indonesia was slapped with one of the highest tariffs – 32% – in the “liberation day” tariffs announced by President Trump. These tariffs have been suspended until early July, during which time the Trump Administration expects most countries to come pleading their cases and promising to boost their imports of U.S. goods to avoid high tariffs.
“It is not only a matter of price but also geopolitical issues, we need to have a balance with other countries,” Lahadalia said earlier in May.
In April, the minister said that Indonesia, which is Southeast Asia’s biggest economy, would offer to buy an additional $10 billion worth of American oil and liquefied petroleum gas (LPG).
By Charles Kennedy for Oilprice.com
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