The Dynamics of Fuel Growth in Indonesia: Coexistence Between Refinery Feedstock and Imported Crude Oil

Abstract : This study examines the dynamic interplay between international crude oil prices, import dependency, and refinery input in shaping Indonesia’s national fuel oil consumption. Amid growing concerns over energy security, the research investigates how fluctuations in global oil markets and domestic refining capacity impact the country’s ability to meet energy demand sustainably. Drawing upon secondary data from authoritative sources, a multiple linear regression model was employed to quantify the relationship among the key variables: crude oil price (X₁), crude oil imports (X₂), and refinery input (X₃), with fuel consumption (Y) as the dependent variable. The findings indicate that both crude oil price and import volume positively and significantly affect fuel consumption, while refinery input shows a negative but statistically insignificant effect. The model explains approximately 65.3% of the variation in fuel consumption (R² = 0.653), suggesting a moderately strong explanatory power. Classical assumption tests revealed that the residuals are normally distributed (Shapiro-Wilk p = 0.417), although multicollinearity (VIF X₁, X₂ > 5) and autocorrelation (Durbin-Watson = 1.023) were detected, alongside heteroscedasticity in residual patterns. These insights underline the importance of managing oil import policies and refining strategies to stabilize domestic fuel supply. Moreover, the study supports the broader transition toward sustainable energy, especially through city gas development, as aligned with national and institutional research roadmaps. The study offers valuable implications for policymakers in designing resilient and adaptive energy strategies in the face of global market volatility.