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Jurnal Ekonomi Malaysia

54 (2) 2020 125 – 136

The Relationship between Consumption and Imports of Fuel Oil in Indonesia
Hubungan antara Penggunaan dan Import terhadap Minyak Bahan Api di Indonesia

Faculty of Economics
Universitas Negeri Padang
Road Prof. Dr. Hamka Air Tawar
Padang, West Sumatra
25131 INDONESIA.

s3dkpl@gmail.com

Faculty of Economics
Universitas Negeri Padang
Road Prof. Dr. Hamka Air Tawar
Padang, West Sumatra
25131 INDONESIA.

sany@fe.unp.ac.id

Faculty of Economics
Universitas Negeri Padang
Road Prof. Dr. Hamka Air Tawar
Padang, West Sumatra
25131 INDONESIA.

perengki.unp@g

Abstract

This study examines the short- and long-run relationship between consumption and imports of fuel oil in Indonesia using a time series data spanning from 1988 to 2018. A Vector Error Correction Model (VECM) approach has been used in examining the short- and long-term conditions designed based on the theoretical framework of the Keynesian consumption model. The results show that the import and price of fuel oil significantly affect fuel oil consumption in Indonesia. Notably, fuel oil imports and prices disrupt the equilibrium of fuel oil consumption in the short term, although, in the long term, the consumption returns to the equilibrium. Moreover, fuel oil consumption and the exchange rate also significantly affect fuel oil imports in Indonesia. Specifically, the exchange rate disrupts fuel oil imports in the short term, then returns to the equilibrium in the long term. Accordingly, the Indonesian government needs to manage fuel oil imports and exchange rate stability to eliminate short-term disruptions in Indonesia’s fuel oil imports.

Keywords

exchange rate; Fuel oil consumption; fuel oil import

Author’s Acknowledgement

This study was supported by a research grant from the Postgraduate Program in Economics, Faculty of Economics, Universitas Negeri Padang. The authors are very grateful for the generous help from Ms. Ratih Kushandayani from the Department of Chemical Engineering, Institut Teknologi Bandung. We are also greatly indebted to Mr. Arie Wibowo from the Department of Material Engineering, Institut Teknologi Bandung and Ms. Akfiny Hasdi Aimon from the Department of Physics, Institut Teknologi Bandung.

http://dx.doi.org/10.17576/JEM-2020-5402-11
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Aimon, , SanyDwita, , & Susanto, (2020). The Relationship between Consumption and Imports of Fuel Oil in Indonesia. Jurnal Ekonomi Malaysia, 54(2), 125–136. http://dx.doi.org/10.17576/JEM-2020-5402-11

@article{aimon2020relationship,
  title={The Relationship between Consumption and Imports of Fuel Oil in Indonesia},
  author={Aimon, Hasdi and SanyDwita, and Susanto, Perengki},
  journal={Jurnal Ekonomi Malaysia},
  volume={54},
  number={2},
  pages={125—136},
 

year={2020},
}

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