Gasoline consumption and imports in Indonesia, Asia’s largest importer of the motor fuel, could hit records this year as the nation recovers from COVID-related travel curbs, although growth is expected to slow slightly along with its economy.

A spike in Indonesian imports would tighten the regional gasoline market and likely boost Asian refinery margins for the fuel. It could also accelerate plans for adding methanol and ethanol to gasoline to reduced its reliance on overseas supplies, a biofuel initiative that would add to the country’s already extensive adoption of biodiesel.

Indonesia’s gasoline consumption is headed for an all-time high of 670,000 barrels per day (bpd) in 2023, up from a record 635,000 bpd in 2022, consultancy Rystad Energy said.

“Post-COVID recovery is the main driver behind the growth of gasoline demand,” said Sofia Guidi Di Sante, a senior oil markets analyst at Rystad Energy.

“We have factored in a milder growth rate due to the plausible repercussions of a potential global recession.”

Consultancy Wood Mackenzie said Indonesia’s gasoline imports surpassed pre-pandemic levels last year at 380,000 bpd, a historic high based on data that goes back to 2010. This could rise to 390,000 to 400,000 bpd this year, WoodMac said.

Refinitiv Oil Research estimated imports at about 15 million tonnes (345,000 bpd) for 2022, up from around 11.5 million tonnes in 2021.

“Demand is still expected to be robust with (Indonesia’s) strong economic growth and mobility,” said Ranice Tan, a research analyst at WoodMac.

“However, growth is expected to slow down due to several fuel price increases last year (to contain ballooning subsidies) and potential recessionary effects.”

Indonesia raised subsidised fuel prices by about 30 per cent in early September as the government moved to rein in increasing costs to its budget.

Still, government subsidies, which make up about half the retail price of gasoline, have softened the blow of skyrocketing energy prices for consumers, Tan said.

And this year the government has increased the volume of subsidised gasoline for distribution.

Sales of subsidised gasoline stood at 29.81 million kl (513,700 bpd) in 2022, according to estimates by Indonesia’s downstream oil and gas regulator BPH Migas, said Saleh Abdurrahman, a committee member at the regulator.

This year, BPH Migas has allocated 32.56 million kl of subsidised gasoline for distribution, it said in a statement.