Jakarta. The Russian government said Saturday that the prices of oil to be sold to Indonesia still have to go through business-to-business negotiations, dismissing media reports that Jakarta would face a higher bill.
A local news outlet recently published a story with a headline that went Jakarta would not get discounts — and even had to pay higher prices — on its Moscow oil deal, quoting Russian ambassador Sergei Tolchenov. The news came after Russia agreed to sell crude and liquefied petroleum gas (LPG) to Indonesia following high-level Moscow talks. The embassy issued a clarification on its social media, saying that the Moscow is “ready to cooperate” with Jakarta in fossil fuel supply.
“But oil prices are to be discussed and agreed upon by the business entities of Russia and Indonesia, depending on the current global market conditions,” a statement by the embassy reads.
The embassy went on to explain that both governments will facilitate the process. This includes creating conditions necessary for a constructive dialogue, as well as an “effective and cost-efficient supply of oil”. Talks on the formats of the collaboration remain underway following proper business mechanisms.
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The state-owned energy firm Pertamina is taking part in the deal. The company has said its refineries are capable of processing the Russian crude, and is now waiting for the government’s orders.
Energy Minister Bahlil Lahadalia has signaled that the Russian crude could begin to make its way to Jakarta soon, while staying tight-lipped on the volume. They are also still finalizing the LPG delivery.
“The sooner, the better,” Bahlil told reporters on Friday.
The Iran war has sent countries scrounging around for energy supplies after Tehran shut down traffic in the Strait of Hormuz — a vital oil chokepoint — in retaliation for the Israeli-US airstrikes. Now that the strait has reopened, two Indonesian tankers — one carrying homebound light crude oil — are getting ready to exit the waterway. The global crude benchmark Brent tumbled 10% to around $90 a barrel on Friday after the strait reopened for commercial traffic.
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