Jakarta – Indonesia may need three to four years to become a net oil exporter again, with new oil refinery projects expected to shore up domestic fuel supplies, said Finance Minister Jusuf Anwar.

'We're trying to open new refineries to add production, so that within three to four years we are back to being a net oil exporter,' Anwar said last night.

He said Indonesia is still a net oil exporter if gas output is taken into account.

However, as Indonesia imports more oil than it exports, the government may not be able to offset the rising cost of fuel subsidies from oil revenue alone.

Anwar said fuel subsidies may reach 120 trln rupiah this year against the budgeted 76.5 trln, amid higher-than-expected fuel consumption and world oil prices. Although a member of the Organization of Petroleum Exporting Countries (OPEC), Indonesia relies on oil and fuel imports because of rising domestic consumption and a lack of investment which has caused oil production to drop.

Government officials predict Indonesia's oil output will fall below the state budget's target of an average 1.125 mln barrels per day (bpd) this year.

Indonesia's nine oil refineries, meanwhile, lack the capacity to meet local fuel consumption.

Last month, state oil and gas company PT Pertamina and China Petroleum and Chemical Corp (Sinopec) agreed to build a refinery in Tuban, East Java.

The Tuban refinery will process oil from the Cepu oil block, which is expected to come on stream in late 2007 or early 2008, with output of up to 170,000 bpd. Pertamina and ExxonMobil Oil Indonesia Inc will jointly develop the Cepu block.