Indonesia Cuts Fuel Imports, Minister Bahlil Says Importers Are Unhappy

3 hours ago 2

TEMPO.CO, Jakarta - The Indonesian Minister of Energy and Mineral Resources, Bahlil Lahadalia, stated that several importers expressed their discontent with the government's policy to reduce oil imports. However, he said that the policy was created to reduce dependency on foreign energy supplies.

Bahlil stated that national fuel consumption reaches 40 million kiloliters (KL) per year, yet domestic production only reaches around 20 million KL. This situation has arisen amid the development of the inaugurated Balikpapan Refinery Development Master Plan (RDMP) project.

"So, now we only import 20 million kiloliters of fuel. This is why the importers are angry with me. My perspective going forward is that we should not import," said Bahlil in the INDEF Mid-Year Study Seminar 2026 in Central Jakarta, on Thursday, June 25, 2026.

He stated that although oil production or lifting has not yet met domestic needs, the government needs to convert some energy demand to bioenergy. Bahlil mentioned that if the B50 biodiesel program can meet the demand for diesel, a similar approach should be taken to reduce fuel dependency.

Therefore, he mentioned that the government plans to implement a 20 percent ethanol (E20) fuel mix program in 2028 to reduce fuel imports. He believes this policy could reduce fuel imports by up to 4 million KL.

Bahlil explained that the use of ethanol as a fuel blend has been implemented in several countries, such as the United States and Brazil. This step is crucial for reducing imports and preventing the continuous flow of foreign exchange out of the country.

In addition to reducing imports, Bahlil believes that this policy can help maintain the stability of the rupiah exchange rate. He mentioned that Indonesia spends approximately $30 billion each year on fuel imports.

Furthermore, the government is also considering alternative mechanisms for international trade that are not dependent on the US dollar. He believes that diversifying currencies in trade transactions could reduce dependency on the dollar.

Read: Global Oil Prices Plunge Below US$80: What Happens?

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