Pertamina sets up strategies against geopolitical impacts, rupiah depreciation

Published on 06/05/2024 at 17:13 GMT+7 Reading time

State oil and gas company PT Pertamina has prepared a number of strategic steps to anticipate the impact of geopolitical conditions and the depreciation of the rupiah exchange rate.

Pertamina's VP for Corporate Communication, Fadjar Djoko Santoso, ensures that the supply of fuel oil (BBM) for Indonesia is safe and has not been affected by geopolitical conflicts in the Middle East. He says that domestic needs of BBM is served by domestic refineries, as well as imports from several countries in Africa.

"In addition to domestic crude oil production, Pertamina imports crude oil from Saudi Arabia, Nigeria, and several countries in Africa," Fadjar said on Saturday, May 4, 2024).

He said further that Pertamina has also mitigated the risk of rupiah depreciation by conducting foreign exchange hedging transactions and balancing monetary assets to reduce exposure to translation exchange rate risks. Furthermore, Pertamina also renegotiates obligations in dollars into rupiah and makes payments using Local Currency Settlement (LCS).

As a state-owned corporation, Fadjar added, Pertamina hopes that the government can support the company's main focus in maintaining national energy resilience and also support energy transition which will accelerate decarbonization programs and green energy businesses in the future.

Amin Ak, a House of Representatives (DPR RI) legislator of the Prosperous Justice Party (PKS) Faction, reminded the government to anticipate the economic impact of the Iran - Israel conflict, especially in terms of maintaining domestic oil supplies.

Amin, who is also a member of the House’s Energy Task Force, emphasized that global oil supplies could be affected because Iran is one of the largest oil producers in the world.

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