Pertamina issues first spot tender to buy 90R gasoline

Indonesia's state-owned refiner Pertamina has issued a spot tender to buy gasoline with a minimum Ron rating of 90 for the first time in response to a surge in domestic demand.

Pertamina — Asia-Pacific's largest gasoline buyer — is looking to purchase 200,000 bl of 90R for 1-5 November loading from Singapore/Malaysia or Karimun in Indonesia, or similar volumes of 90R for 1-10 November delivery to Cilacap in Indonesia. The pricing basis will be on either Argus or Platts' 92R spot assessments, whichever is lower. The gasoline should have a maximum sulphur content of 500ppm and maximum oxygen content of 2.7pc. The tender closed on 19 October but would remain valid until today.

The 90R gasoline is usually produced by Pertamina's domestic refineries through blending with other grades or naphtha, but a surge in demand thanks to a return of driving activity, coupled with an increase in requirements for higher-octane cargoes, has prompted the firm to look at imports.

Pertamina typically buys 92R and 88R gasoline cargoes through spot tenders and has imported 90R gasoline before but this is the first time it is seeking the grade through a spot tender, a trader said.

The firm has been trying to shift demand away from 88R towards 90R and above in recent years. Pertamina sells five fuel types at its retail stations — Premium, Pertalite, Pertamax, Pertamax Turbo and Pertamax Racing with a minimum Ron rating of 88, 90, 92, 98 and 100 respectively.

The volume spread between gasoline cargoes with a Ron rating above 90 and other motor spirit, presumably 88R, has increased considerably over the years (see graph). Indonesia imported an average 9.19mn bl/month more 88R gasoline than cargoes with a Ron rating above 90 in 2014, according to GTT data. But that trend reversed in the first half of 2021, with Indonesia importing an average 687,178 bl/month less 88R gasoline than cargoes with a Ron rating above 90.

Regional refiners have also noticed this shift in demand and have been tweaking their refineries to offer less of the 88R grade and more gasoline with a Ron rating above 90, an Asian refiner said.

By Aldric Chew

Indonesia's inter-Ron volume spread bl