Indonesia lowers sulfur content of subsidized diesel

Indonesia lowers sulfur content of subsidized diesel

Indonesia has lowered the sulfur content of its subsidized diesel in line
with a global shift to move towards using cleaner fuel to curb pollution.

State-owned Pertamina reduced the sulfur in its diesel to 2,500 ppm from the
current 3,500 ppm from this January, two Pertamina officials said on
Thursday.

Indonesia remains one of the few countries in Asia to still use diesel with
a high sulfur content, traders said. This is the first time in at least 10
years that the country has lowered the sulfur content of the fuel, mainly
used to drive trucks and buses in the country.

But the tweak was unlikely to have a major impact on trade flows, said
Energy Aspects oil products analyst Nevyn Nah.

"(Indonesia) is one of the few high sulfur (gasoil) shorts left, so changing
from 3,500 or 5,000 ppm to 2,500 ppm doesn't change a lot," said Nah. "It's
a very easy desulfurization step and much easier than getting down from 500
to 10 ppm, for example."

Pertamina's overall diesel imports have been falling in the past two years
due to a hike in domestic retail prices and a higher local biodiesel mandate
keeping a lid on demand, though demand for diesel use in the mining sector
has increased.

The country's diesel demand fell to 480,000 barrels-per-day in 2016, from
483,000 bpd in 2015, said Nah. Imports of the fuel fell to 110,000 bpd in
2016 from 140,000 bpd, he added.

While Indonesia's imports of diesel are expected to be stable this year,
shipments of higher quality diesel are expected to increase.

Pertamina is expected to import mainly diesel with a sulfur content of 350
ppm and 500 ppm this year, said Ahmad Bambang, deputy chairman of Pertamina.

Demand for high quality diesel and gasoline is going up due to the narrow
price difference between lower quality and higher quality fuels, a Pertamina
official said, declining to be named as he was not authorized to speak with
the media.

"We will only need to import a small volume of 2,500ppm (diesel) if our
refineries are running maximum and imports of 350 to 500 ppm will depend on
demand," the official said.

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Link to Original Article:
http://www.hydrocarbonprocessing.com/news/2017/01/indonesia-lowers-sulfur-co
ntent-of-subsidized-diesel

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com