GOVERNANCE AND MACROECONOMIC DETERMINANTS OF OIL IMPORT DEPENDENCY: A SUSTAINABILITY PERSPECTIVE FROM INDONESIA
Keywords:
Oil And Gas Import Dependency, Macroeconomic Determinants, Indonesia, Interest Rates, Blue–Green Economy
Abstract
This paper assesses how macroeconomic conditions shape Indonesia’s oil and gas (O&G) import dependency over 2000–2024. Using an explanatory, single-country, annual time-series design, we estimate a linear log-level model via Maximum Likelihood, relating oil and gas import value to real GDP growth, the rupiah time-deposit interest rate, and CPI inflation. To retain parsimony, the baseline omits controls, results are interpreted as conditional associations. Findings show growth is positive and significant (β=0.052, p=0.003), the deposit rate is negative and significant (β=−0.050, p<0.001), while inflation is small and not significant (β=−0.004, p=0.608), model fit is R²=0.620. Semi-elasticities imply that a 1-pp increase in growth is associated with ≈5.2% higher import values, whereas a 1-pp rise in the deposit rate is associated with ≈5.0% lower values. These results indicate an income channel under short-run supply inelasticity and a dominant aggregate-demand/financing-cost channel that outweighs appreciation-induced cheap-import effects. Policy implications for a blue–green economy include coordinated monetary–trade–energy governance, disciplined procurement and hedging, and structural measures energy efficiency, transport electrification, and fuel-mix diversification so expansions do not mechanically raise fossil import dependence. Limitations include the absence of key controls (exchange rate, oil prices, domestic production).
References
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A. Cherp et al., “Energy and Security,” cambridge university, 2012, pp. 325–384. doi: 10.1017/cbo9780511793677.011.
A. Fernández and A. Gulan, “Interest Rates, Leverage, and Business Cycles in Emerging Economies: The Role of Financial Frictions,” American Economic Journal: Macroeconomics, vol. 7, no. 3, pp. 153–188, Jul. 2015, doi: 10.1257/mac.20120141.
A. Soemanto, Y. Gunawan, M. Irsyad, and E. Mohi, “The Role of Oil Fuels on the Energy Transition toward Net Zero Emissions in Indonesia: A Policy Review,” Evergreen, vol. 10, no. 4, pp. 2074–2083, Dec. 2023, doi: 10.5109/7160867.
A. Soemanto, Y. Gunawan, M. Irsyad, and E. Mohi, “The Role of Oil Fuels on the Energy Transition toward Net Zero Emissions in Indonesia: A Policy Review,” Evergreen, vol. 10, no. 4, pp. 2074–2083, Dec. 2023, doi: 10.5109/7160867.
A. Watson, “Trade openness and inflation: The role of real and nominal price rigidities,” Journal of International Money and Finance, vol. 64, pp. 137–169, Feb. 2016, doi: 10.1016/j.jimonfin.2016.02.002.
D. Muhafidin, “THE ROLE OF FISCAL POLICY AND MONETARY POLICY IN ENVIRONMENTAL DEGRADATION IN INDONESIA,” International Journal of Energy Economics and Policy, vol. 10, no. 3, pp. 504–510, Mar. 2020, doi: 10.32479/ijeep.9586.
E. Nakamura, J. Steinsson, D. Villar, and P. Sun, “The Elusive Costs of Inflation: Price Dispersion during the U.S. Great Inflation*,” The Quarterly Journal of Economics, vol. 133, no. 4, pp. 1933–1980, Aug. 2018, doi: 10.1093/qje/qjy017.
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J. M. Campa and L. Goldberg, “Exchange Rate Pass-Through into Import Prices: A Macro or Micro Phenomenon?,” national bureau of economic research, May 2002. doi: 10.3386/w8934.
K. S. Wicaksana, A. S. A. A. Prasojo, R. F. Ramadhan, and M. ’Azza Sujaka, “The Effect of the Russia-Ukraine Crisis on Price Fluctuations and Trade in Energy Sector in Indonesia,” Jurnal Nasional Pengelolaan Energi MigasZoom, vol. 4, no. 1, pp. 6–18, Jun. 2022, doi: 10.37525/mz/2022-1/345.
K. S. Wicaksana, A. S. A. A. Prasojo, R. F. Ramadhan, and M. ’Azza Sujaka, “The Effect of the Russia-Ukraine Crisis on Price Fluctuations and Trade in Energy Sector in Indonesia,” Jurnal Nasional Pengelolaan Energi MigasZoom, vol. 4, no. 1, pp. 6–18, Jun. 2022, doi: 10.37525/mz/2022-1/345.
M. Balcilar, J. Uwilingiye, and R. Gupta, “Dynamic Relationship Between Oil Price And Inflation In South Africa,” The Journal of Developing Areas, vol. 52, no. 2, pp. 73–93, Nov. 2017, doi: 10.1353/jda.2018.0023.
M. Kabil, B. Galovics, L. D. Dávid, A. F. Rahmat, and M. Hegedüs, “Circular Economy and Tourism: A Bibliometric Journey Through Scholarly Discourse,” Circular Economy, vol. 2, no. 1, Jan. 2024, doi: 10.55845/hgwo7144.
M. M. Khyareh and N. Rostami, “Macroeconomic Conditions, Innovation and Competitiveness,” Journal of the Knowledge Economy, vol. 13, no. 2, pp. 1321–1340, Mar. 2021, doi: 10.1007/s13132-021-00752-7.
M. Paskov, K. Gërxhani, and H. G. Van De Werfhorst, “Giving Up on the Joneses? The Relationship between Income Inequality and Status-seeking,” European Sociological Review, vol. 33, no. 1, p. jcw052, Jan. 2017, doi: 10.1093/esr/jcw052.
O. Bednář, P. Řežábek, B. Kadeřábková, and A. Čečrdlová, “Energy Prices Impact on Inflationary Spiral,” Energies, vol. 15, no. 9, p. 3443, May 2022, doi: 10.3390/en15093443.
P. A. Dorosh, “Price stabilization, international trade and national cereal stocks: world price shocks and policy response in South Asia,” Food Security, vol. 1, no. 2, pp. 137–149, Mar. 2009, doi: 10.1007/s12571-009-0013-3.
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S. Berdysheva and S. Ikonnikova, “The Energy Transition and Shifts in Fossil Fuel Use: The Study of International Energy Trade and Energy Security Dynamics,” Energies, vol. 14, no. 17, p. 5396, Aug. 2021, doi: 10.3390/en14175396.
S. H. Lesbirel, “Diversification and Energy Security Risks: The Japanese Case,” Japanese Journal of Political Science, vol. 5, no. 1, pp. 1–22, May 2004, doi: 10.1017/s146810990400129x.
T. Pimonenko et al., “The impact of the macroeconomic stability on the energy-efficiency of the European countries: A bibliometric analysis,” E3S Web of Conferences, vol. 234, p. 00013, Jan. 2021, doi: 10.1051/e3sconf/202123400013.
V. Sarin, N. Sood, and S. K. Mahapatra, “Export diversification and economic growth: A review and future research agenda,” Journal of Public Affairs, vol. 22, no. 3, Oct. 2020, doi: 10.1002/pa.2524.
W. Qiang, C. Zhao, X. Wang, M. Liu, Z. Liu, and A. Lin, “The impact of international crude oil price fluctuation on the exchange rate of petroleum-importing countries: a summary of recent studies,” Natural Hazards, vol. 95, no. 1–2, pp. 227–239, Oct. 2018, doi: 10.1007/s11069-018-3501-y.
W. Qiang, C. Zhao, X. Wang, M. Liu, Z. Liu, and A. Lin, “The impact of international crude oil price fluctuation on the exchange rate of petroleum-importing countries: a summary of recent studies,” Natural Hazards, vol. 95, no. 1–2, pp. 227–239, Oct. 2018, doi: 10.1007/s11069-018-3501-y.
Published
2025-12-24
How to Cite
Ismail Kadir H. Palladjarang. (2025). GOVERNANCE AND MACROECONOMIC DETERMINANTS OF OIL IMPORT DEPENDENCY: A SUSTAINABILITY PERSPECTIVE FROM INDONESIA. Journal of Social and Economics Research, 7(2), 644-655. https://doi.org/10.54783/jser.v7i2.1198
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Articles
