Fuel oil supply demand projection and planning in Indonesia using system dynamics modeling

Oil is the most important source of energy and has had a critical impact on economic growth for many years. It has become a global commodity and supplies more than 40% of the total energy demand. The research aims to assess the fuel oil supply and demand in Indonesia for gasoline and diesel oil, and projects the import parameter for both petroleum products using system dynamics modeling. There are 3 scenarios assessed by the simulation model: the first scenario is the base scenario in Indonesia, assuming there is no additional oil refinery capacity and supported by biodiesel production; the second scenario assumes the increasing refinery capacity planned by the government; and the third scenario is the ideal scenario that combines the increased national oil production and utilization of biofuel (both bioethanol and biodiesel). The research shows that for the first scenario, import trend projections of gasoline will keep increasing whereas the diesel oil import will decrease and will be stopped in 2024, when B30 is pushed by the government. The second scenario projects the declining number of gasoline import in line with the increased production capacity, but the gasoline import still reaches 11.6–16.1 million kL. Meanwhile, diesel oil demand will be fully covered by national diesel oil production, and biodiesel, in 2018. The last scenario shows that gasoline import declines significantly because bioethanol is produced. However, this would necessitate least 11.21 million kL of new gasoline refinery production to meet the demand and eliminate the need for import. Either way, the bioethanol mandate should be accelerated and increased to E25–E30 in 2018.