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It should be noted that the last time Pertamina purchased Sokol oil and a mixture of Eastern Siberia was more than 10 years ago. A few months after Russian troops invaded Ukraine, Indonesian President Joko Widodo (Jokowi) decided to consider following China and India in buying oil from Russia.
Pertamina has added two types of Russian oil, Ural and Sokol, along with other oils to the tender list for purchase in September 2024 as reported by The Moscow Times. However, the winner of the oil purchase tender has not been announced yet.
When confirmed, the Corporate Secretary of PT Kilang Pertamina Internasional (KPI), Hermansyah Y Nasroen, did not provide detailed information about the tender offer for the purchase of oil from Russia, including the winner.
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"We always ensure that we purchase crude oil according to the specifications needed by each refinery and comply with applicable regulations, including if it is from Russia, it is done with a price cap mechanism," he told KONTAN on Thursday (1/8/2024).
The price cap mechanism is a regulation of the maximum allowable price for a particular product or commodity. In the context of trading Russian crude oil, this mechanism regulates that oil can only be sold below a certain price limit.
The purpose of this mechanism is to limit the revenue of the selling country, in this case, Russia, and ensure that trade continues at a controlled price. Unfortunately, Hermansyah did not explain how much oil would be imported from Russia for the tender offer in September.
Previously, in December 2022, Western countries set a price limit for Russian oil at US$ 60 or Rp 972,837 per barrel to try to minimize Moscow's revenue flow following the country's invasion of Ukraine.
This price limit also prohibits shipping companies, insurance, and reinsurance from handling Russian crude oil cargoes worldwide, unless sold at a price below this limit.
