Since Indonesia’s state-owned energy firm Pertamina adopted a revised pricing strategy, its VLSFO offer prices in Jakarta and Surabaya have plunged and are now cheaper than Singapore’s VLSFO, says an article on Engine Online.
Revised Planning Strategy
Singapore’s VLSFO is currently priced $15/mt higher than Jakarta’s. The grade’s price in Singapore has been mostly at discounts to Jakarta’s. But these discounts began shrinking after Pertamina introduced a revised pricing strategy for VLSFO in May. The strategy aimed to reduce its VLSFO prices by almost 30% and make it more competitive with the grade’s prices in Singapore and other bunker ports in the region. Since the adoption of the new strategy, there has been a growth in interest from ocean-going vessels to bunkers in Indonesian ports, a source from Pertamina Patra Niaga tells ENGINE. VLSFO prices up in Singapore ($58/mt), and down in Balikpapan ($205/mt), Surabaya ($200/mt) and Jakarta ($198/mt)
Sales On Track
The company’s total bunker sales volumes for ocean-going vessels doubled in July than what it was last year. Moreover, its bunker sales are on track to grow further this month, the source adds. Separately, Pertamina has reduced the validity of its VLSFO prices from two weeks to one week now. Updating its VLSFO prices on a weekly basis will help the company to adapt to price changes due to underlying crude values. This means that Pertamina’s VLSFO prices will now be able to adapt quickly to sudden declines or spikes in underlying crude values, the source explains.
Meanwhile, other grades such as LSMGO or HSFO will continue to be updated on a bi-weekly basis. Despite the price validity for VLSFO being reduced to one week, it could still mean that its offer levels could become even more attractive if bunker prices in other locations like Singapore rise on underlying crude values before Pertamina adjusts its prices again.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Engineonline
