Shell petrol stations in Indonesia run dry on supply shortages

[SINGAPORE] Shell’s retail petrol stations in Indonesia have run out of petrol as import restrictions imposed by the South-east Asian nation crimp supplies.

Three varieties of petrol are currently not available at Shell stations across the country, according to a statement on its website from late last week. A spokesperson said on Tuesday (Oct 7) that the company is coordinating with government and other stakeholders “to restock petrol fuel products at Shell fuel stations as soon as possible”.

Pump stations operated by Shell and BP had run low on fuels in late August. Shell, which flagged supply challenges as far back as January, has about 200 petrol stations across the country. The latest shortages are wider than those seen in recent months.

Petrol supplies across South-east Asia’s largest economy have been tight and, at times, insufficient to meet local demand as government-imposed guidelines limit fuel imports by private retailers such as Shell, BP and Vivo Energy.

State oil and gas company Pertamina can import fuel on behalf of those who have used up their quotas, according to the energy and resources ministry, although at least one retailer has cancelled such an order, citing quality concerns.

The shortfall has prompted Pertamina to issue numerous buy tenders in the second half of this year, according to traders and data compiled by Bloomberg. The buying interest, coupled with unplanned refinery outages across the world due to fires and other issues, lifted the profitability of turning crude into petrol to above the five-year average last month, Bloomberg data show.

The security of Indonesia’s oil supplies has been in the spotlight in recent months as President Prabowo Subianto pushes ahead with a multi-billion dollar corruption probe into Pertamina. Fuel traders based in Singapore have been asked to cooperate with investigations, with Jakarta threatening to drastically cut supplies from the Asian oil hub at one point, as authorities pursued key industry figures for alleged losses and trading irregularities.

Earlier this year, Shell agreed to sell its Indonesian petrol stations and associated fuel distribution operations to a joint venture between Philippines-based Citadel Pacific and Sefas Group. BLOOMBERG