State-owned oil company Pertamina has been importing an average of three of jet-kerosene per month during the last six months through tenders and private negotiations.

These import levels come close to the normal pattern of trade before the 1998 Asian economic crisis. Sellers' participation has increased as well, in the trades which are estimated to be worth around $50 million to $100 million per month, the trade sources said.

"I think they will continue to buy from `ere on," one trader, with a western oil company, said. The credit problems "are not in the least behind us but I think they've successfully got around the situation," the trader said.

Indonesia produces around 1.4 million barrels-per-day (bpd) of crude oil And exports about 60 per cent of it. But oil imports are needed to meet shorfalls from million-bpd refining sector in the production of diesel, fuel oil and gasoline.

Diesel imports averaged some four million barrels per month in 1997 before the Asian crisis sparked currency, liquidity and debt problems for Indonesia.

In March to August last year, Indonesia's oil product imports collapsed as the country tried to stave off its currency crisis.

Traders said Indonesia's return to import form since September was mainly the result of a exchange rate against the US dollar.

"With the rupiah being where it is currently, Indonesia sales are not so risky anymore," one seller, a Japanese trader said.

The rupiah has held a range dollar since late last year, compared to 16,800 at one low point in June last year. Pertamina's cash flows have also improved as the government now pays subsidies on its domestic sales on a monthly basis instead of annually, one trader, based in Jakarta, said.

Oil sellers were also more forthcoming because many international banks were now willing to confirm or back a letter of credit (LC) issued by Indonesian banks for Pertamina's purchases.

This could reach 15 to 20 cents per barrel and on occasions, Pertamina has offered to share the costs of confirmation, traders said.

Traders said they have not faced severe problems with Pertamina's payments lately, although sometimes the state company has requested extended credits of up to 60 days.

Only a few Japanese traders, with offtake businesses to hedge their risks, offer open credit to Pertamina, industry source said.

Traders expect Indonesia to practice an open tender system for imports but as far as volume is concerned, the market already knows roughly what to expect now, they said.

"This means that if they don't buy, the market will consider it negatively," the trader said.