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GOVERNANCE AND MACROECONOMIC DETERMINANTS OF OIL IMPORT DEPENDENCY: A SUSTAINABILITY PERSPECTIVE FROM INDONESIA Ismail Kadir H. Palladjarang
Journal of Social and Economics Research Vol 7 No 2 (2025): JSER, December 2025
Publisher : Ikatan Dosen Menulis

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.54783/jser.v7i2.1198

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).
GOVERNANCE AND MACROECONOMIC DETERMINANTS OF OIL IMPORT DEPENDENCY: A SUSTAINABILITY PERSPECTIVE FROM INDONESIA Ismail Kadir H. Palladjarang
Journal of Social and Economics Research Vol 7 No 2 (2025): JSER, December 2025
Publisher : Ikatan Dosen Menulis

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.54783/jser.v7i2.1198

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).