State-owned oil and gas company PT Pertamina succeeded in saving operational costs of around Rp6 trillion (US$402.46 million) until July 2022 through several efficiency programs amid rising world oil prices that increased fuel production costs.
She explained that energy companies around the world are facing difficult situations as a result of disruption of the global energy supply chain due to the Russia-Ukraine conflict. The global trade mobility leading to post-pandemic recovery was jolted by limited supply that led to an energy crisis.
The president director noted that the Indonesian government’s policy of maintaining the people’s purchasing power through fuel subsidies was the proper measure to accelerate economic recovery.
According to Widyawati, the accuracy of the policy is reflected in the fuel consumption increase for community mobility and business activities.
Pertamina President Director Nicke Widyawati stated that such a success could not be separated from strategic cost-saving measures taken by the company group since the start of this year.
She explained that energy companies around the world are facing difficult situations as a result of disruption of the global energy supply chain due to the Russia-Ukraine conflict. The global trade mobility leading to post-pandemic recovery was jolted by limited supply that led to an energy crisis.
The president director noted that the Indonesian government’s policy of maintaining the people’s purchasing power through fuel subsidies was the proper measure to accelerate economic recovery.
According to Widyawati, the accuracy of the policy is reflected in the fuel consumption increase for community mobility and business activities.
On the other hand, she also pointed out that the increase in fuel consumption had caused an increase in the burden of government subsidies.
“We understand the heavy burden of the government’s fuel subsidy, and for that Pertamina carries out various cost-saving programs in order to help reduce the burden,” she stated.
She remarked that the largest chunk of the company’s cost of fuel production is for the purchase of crude oil, which accounts for 92 percent of the production costs.
Fortunately, investment in upgrading the Pertamina Oil Refinery, which had been conducted in the last four years, had succeeded in increasing the flexibility of crude oil availability.
It means, if so far, the Pertamina refinery has only been able to process certain crude oil that is expensive, but starting last year, it has been able to process crude oil, with a higher sulfur content, which is cheaper and can be gained from many sources,” Widyawati stated.
This is Pertamina’s strategic move that has succeeded in significantly reducing fuel production costs, she affirmed.
In addition, the company’s energy efficiency efforts in all operational areas — from upstream to downstream — had caused significant cost savings while also contributing to a reduction in carbon emissions.
“The post-restructuring breakthrough, which is also significant to achieve Pertamina Group’s efficiency, is the centralization of the procurement of goods and services, as well as the integration and optimization of all assets from upstream to downstream,” she stated.
Apart from saving costs, the Pertamina Group has also succeeded in increasing its revenue through the export of high value-added products, such as HVO (palm-based D100) and Low Sulfur Fuel Oil.
By upgrading its refineries, Pertamina has currently been able to produce more low-carbon products whose demand had continued to increase, thereby capturing a very prospective opportunity in the midst of global demand for such a product.
“For Pertamina, cost savings are not just about cutting costs but also changing operating models and improving business processes, so that all company programs can be carried out and all targets are achieved, but at a lower cost,” Widyawati stated.
“Pertamina will continue to make various efforts to save costs, which at the same time can reduce carbon emissions, thereby supporting the company’s and national energy transition efforts,” she said.
Contact: Fajriyah Usman, VP Corporate Communications, PT Pertamina (Persero)
M: +62 858 8330 8686, Email: fajriyah.usman@pertamina.com, URL: https://www.pertamina.com
Written by: Yuni Arisandy Sinaga, Editor: Rahmad Nasution (c) ANTARA 2022