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Study of Fuel Oil Supply and Consumption in Indonesia

Author

Listed:
  • Akhmad Akhmad

    (Faculty of Economics and Business, University of Muhammadiyah, Makassar, Indonesia.)

  • Amir Amir

    (Faculty of Economics and Business, University of Muhammadiyah, Makassar, Indonesia.)

Abstract

The consumption of fuel oil (BBM) in Indonesia for the last ten years is increasing along with the increase in economic growth and the number of population. The increase in fuel oil consumption is not accompanied with the increase in domestic oil production. The research aimed to find out factors influencing fuel oil supply and consumption and forecasting the supply and consumption in Indonesia in the future. The research used time series data for 1997-2016. The research used econometrics model with simultaneous equation system. The model of simultaneous equation system built was consisted of 11 structural equations and 2 identic equations. The result of analysis indicated that factors influencing the supply of fuel oil were world oil price and the supply of oil in the previous year. In addition, factors influencing the consumption of fuel oil were fuel oil price and fuel oil consumption in the previous year. The result of forecasting indicates that fuel oil consumption in Indonesia up to 2025 is increasing in average of 4.07 percent for gasoline, 2.99 percent for kerosene, and 3.19 percent for diesel per year. In addition, the price of fuel oil in Indonesia was estimated to increase in average of 3.76 percent for gasoline, 3.87 percent for kerosene, and 3.19 percent for diesel, whereas, import of fuel oil increased in average of 4.83 percent per year.

Suggested Citation

  • Akhmad Akhmad & Amir Amir, 2018. "Study of Fuel Oil Supply and Consumption in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 8(4), pages 13-20.
    • Handle: RePEc:eco:journ2:2018-04-2
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    References listed on IDEAS

    as
    1. Sallahuddin Hassan & Ismail Aliyu Danmaraya & Muhammad Rabiu Danlami, 2018. "Energy Consumption and Manufacturing Performance in Sub-Saharan Africa: Does Income Group Matters?," International Journal of Energy Economics and Policy, Econjournals, vol. 8(1), pages 175-180.
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    Cited by:

    1. Milwan Milwan & Hary Kurniawan & M. Entang Adhy & Udin Udin, 2020. "Policy Implementation of One-Price Fuel Oil Distribution: An Empirical Study in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(2), pages 294-301.
    2. Indra Gunawan & Anak Agung Ngurah Perwira Redi & Ahmad Arif Santosa & Meilinda Fitriani Nur Maghfiroh & Andante Hadi Pandyaswargo & Adji Candra Kurniawan, 2022. "Determinants of Customer Intentions to Use Electric Vehicle in Indonesia: An Integrated Model Analysis," Sustainability, MDPI, vol. 14(4), pages 1-22, February.
    3. Akhmad Akhmad & Ambo Asse & Nursalam Nursalam & Ibrahim Ibrahim & Bunyamin Bunyamin & Ansaar Ansaar & Sahajuddin Sahajuddin, 2023. "The Impact of the Increase of Oil Fuel Price and Government Subsidy on Indonesia’s Economic Performance," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 547-557, November.
    4. Aimon, Hasdi & SanyDwita, & Susanto, Perengki, 2020. "The Relationship between Consumption and Imports of Fuel Oil in Indonesia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 54(2), pages 125-136.
    5. Sharma, Susan Sunila & Phan, Dinh Hoang Bach & Iyke, Bernard, 2019. "Do oil prices predict Indonesian macroeconomy?," Economic Modelling, Elsevier, vol. 82(C), pages 2-12.
    6. Sylvia Mardiana & Ferdinand Saragih & Martani Huseini, 2020. "Forecasting Gasoline Demand in Indonesia Using Time Series," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 132-145.
    7. Akhmad Akhmad & Buyung Romadhoni & Kasnaeny Karim & Muhammad Jibril Tajibu & Muhammad Syukur, 2019. "The Impact of Fuel Oil Price Fluctuations on Indonesia s Macro Economic Condition," International Journal of Energy Economics and Policy, Econjournals, vol. 9(2), pages 277-282.
    8. Buyung Romadhoni & Akhmad Akhmad, 2020. "Household Electricity Demand in South Sulawesi, Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 229-233.
    9. Heru Wahyudi & Winda Rika Lestasi & Ratna Septiyanti & Widia Anggi Palupi, 2023. "Walking as an Alternative to Indonesia s Oil Consumption Problem," International Journal of Energy Economics and Policy, Econjournals, vol. 13(4), pages 111-119, July.
    10. Toto Gunarto & Rialdi Azhar & Novita Tresiana & Supriyanto Supriyanto & Ayi Ahadiat, 2020. "Accurate Estimated Model of Volatility Crude Oil Price," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 228-233.
    11. Selamet Joko Utomo & Titov Chuk's Mayvani & Mochamad Ali Imron, 2021. "Coal Energy and Macroeconomic Conditions," International Journal of Energy Economics and Policy, Econjournals, vol. 11(4), pages 426-432.
    12. Andi Desfiandi & Faurani Santi Singagerda & Anuar Sanusi, 2019. "Building an Energy Consumption Model and Sustainable Economic Growth in Emerging Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 9(2), pages 51-66.

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    More about this item

    Keywords

    Time Series; Simultaneous equations; Supply and Consumption of Fuel Oil;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

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