JAKARTA: Indonesia is expected to import about 8.2 million barrels of 88-octane gasoline in February. The higher import targets for February versus January were however not expected to lift sellers’ sentiment as Asia has been hit by high supplies.
The weak fundamentals have kept gasoline prices in contango since early December, data from pricing agency Platts showed.
Contango is an industry term used to describe a weak market where front-month prices are lower than the following month.
Demand for gasoline is mostly inelastic even with the removal of subsidies, traders said.
Since Jan. 1, the Indonesian government stopped subsidising gasoline prices altogether and moved to setting prices according to changes in global oil markets.
“If Indonesia lowers demand, that is more likely a result of an overall slowdown in the economy rather than subsidies being removed,” said a trader.
