The upstream oil and gas industry holds an important role as one of the economic drivers in Indonesia, especially for the local communities in the areas where the oil and gas operations are located. This industry creates multiplier effects for other business sectors but unfortunately, the Covid-19 pandemic has been affecting the industry and its contribution to the local economy.
The Covid-19 pandemic has severely reduced the global demand for oil. But the low oil demand as well as the low crude oil price does not instantly cut down the fuel price since there is a refining process that takes place in between the upstream and downstream sectors.
The Covid-19 pandemic has been one of the key factors that has pushed the oil price to a new low and is limiting the supply and logistics chain in the oil and gas sector around the world, including Indonesia. SKK Migas have stated that the pandemic has led to significant disruption to oil and gas operations and demand as well as to oil and gas lifting.