JAKARTA ( Reuters/Bloomberg ): Indonesia plans to change the source of some of its fuel imports from Singapore to the United States as part of negotiations over steep tariffs, its energy minister has announced.
The US has imposed a 32 per cent tax on Indonesian products, but like with other countries, application has been paused until July to create room for negotiations.
Energy and Mineral Resources Minister Bahlil Lahadalia said that the move ahead from Singapore for some energy exports may occur eventually. Indonesia could change as much as 60 per cent of its overall gas imports from Singapore to the US in the beginning stages, he said.
“It is almost certain that we will take other fuel imports from other countries, not from ( Singapore ), ” he told reporters.
Manufacturers will be switched to those in the US and Middle East as Indonesia seeks lower rates and a “better stability ” in the changing global political environment, Bahlil said.
Indonesia is among several states seeking to balance their business relationships with the US to prevent President Donald Trump’s punishing tariffs.
Increasing gas imports from the US is portion of a wider plan that Indonesia has made to Washington to handle the taxes. Authorities in Jakarta have offered to increase purchases of US goods like oil and liquid gas fuel.
The government has said that it wants to increase US energy imports by about US$ 10 billion ( S$ 13 billion ), which also includes buying US fuel, crude oil and liquefied petroleum gas.
Bahlil has said that as part of the conversations, Indonesia wants to buy 10 days more US simplistic than today. At current, about 4 per cent of its crude exports are from the US.
State energy company Pertamina has said that it will be ready to execute the plan and might need to increase its fuel storage capability in order to keep US energy.
Singapore has no crude oil production of its own, but it is a processing gateway and a big supplier of goods to different countries in the region.
That includes Indonesia, whose personal production of the fossil fuel has shrunk over the years and which exports about 290,000 barrels per day of wet delicate fuels from its smaller ally, according to research from Sentosa Shipbrokers.
Most of those moves from Singapore consist of diesel and gasoil.
“If these plans come to fruition, it may certainly be a noticeable change for the ship market, ” said Sentosa.
Bahlil said the cuts may begin within six weeks and that Pertamina is building shoreline to handle larger containers. He had said earlier this week that Indonesia would dismiss its oil exports from Singapore for six weeks. — REUTERS, News