(EnergyAsia, February 26, Thursday) — The Indonesian government has announced plans to expand the country’s oil refining capacity by 400,000 b/d to reduce its growing dependence on oil product imports.

President Bambang Susilo Yudhoyono said state oil and gas firm Pertamina will be given support to build two new plants and expand the capacity of an existing one.

The new refineries will be built in Bojonegara, Banten, and in Tuban, East Java, while the 125,000 b/d Balongan, West Java plant is the largest in its stable of nine with a total one million b/d of capacity.

 President Yudhoyono, who last October issued a decree giving tax breaks for investment in refineries, said the government is prepared to consider new incentives.

Pertamina, which has the monopoly over the refining sector, is struggling to meet the country’s growing oil products demand. Imports today meet 30% of Indonesia’s oil demand.

The company has yet to figure out how it plans to fund the new projects and the crude oil feed. With credit and new oil supplies hard to find, Pertamina, has not set a firm deadline for the start of construction of the projects.