The fuel oil (BBM), used in the economic activities, is produced by an oil refinery. The crude oil derived from a number of fields is not processed into fuel oil only, but also other products such as paraxylene which is required by the petrochemical industry.
In one year, about 72 million kilo liters of fuel oil are needed. Meanwhile, Pertamina, as the state-owned oil company is only able to supply 39 million kiloliters. To cover the gap, Pertamina has to import crude and fuel oil from overseas.
The percentage of crude oil import is getting bigger year to year between 33 and 44 percent. This of course has been depleting the foreign exchange reserves. On the other hand, this increase shows the growing activities of the Indonesian economy.
In order to save the foreign exchange reserves, Pertamina has taken initiative to work on fuel oil projects which are divided into two groups. The first group is upgrading four oil refineries namely RU V Balikpapan, RU VI Balongan, RU IV Cilacap and RU II Dumai. This project is known as the Refinery Development Master Plan (RDMP).
The second group is building brand new oil refineries (New Grass Root Refinery, NGRR) in Tuban and Bontang.
“The goal of the projects is to make Pertamina achieve self-sufficiency in fuel oil by 2023, as stipulated in Nawacita by the Jokowi-JK administration,” said Rachmad Hardadi, Pertamina’s Director of Megaproject Processing and Petrochemical of PT Pertamina (Persero) in a written statement.
Rachmad Hardadi added the six projects were expected to increase the production capacity of oil refineries operated by Pertamina to 2.2 million barrels per day. The six oil refinery megaprojects are estimated to cost around Rp500 trillion.
“The biggest challenge faced by the Petrochemical Processing Directorate is to realize all the megaprojects in 7 years, so to be completed in 2023. It is two years ahead of the target of the government. Therefore, we need the support of all parties,” said Rachmad Hardadi.