Indonesia Issues Decree on Oil Imports

Indonesia has issued a decree allowing a state agency to import oil and liquefied petroleum gas (LPG) to ensure energy security, with the public service agency permitted to import crude oil, fuels, and LPG during "urgent conditions" [1]. The decree also grants authority to Lemigas, an agency under the Energy and Mineral Resources Ministry, to import oil, including from Russia, according to deputy energy minister Yuliot Tanjung [1]. This move comes as Indonesia consumes around 1.52 million barrels of oil per day, while domestic production is only 610,000 barrels per day, forcing the country to rely heavily on foreign crude [2].

The new regulation is part of Indonesia's efforts to reduce its dependence on foreign energy sources, with the government aiming to increase domestic production and cut import dependence [2]. The country's energy ministry has requested that the regulatory framework be completed by the end of June and implemented in early July, with ESDM Deputy Minister Yuliot stating that the policy push comes at a critical time for Indonesia's currency [2]. The rupiah has been slipping, trading at Rp18,066 per US dollar, which increases the cost of Indonesia's energy imports [2].

The decree also allows the government to suspend exports from domestic oil and gas blocks during emergencies, with Lemigas and energy SOEs permitted to independently procure oil and gas if domestic supplies are disrupted [3]. The regulation aims to maintain good governance in the procurement of crude oil, fuel oil, and LPG, and improve the continuity, reliability, and resilience of the national energy supply [3]. President Prabowo Subianto has been working to strengthen Indonesia's energy security, visiting Japan, South Korea, and Russia to secure energy partnerships and reduce the country's strategic vulnerability [4].

The move is significant, as Indonesia is distinguishing itself within Southeast Asia through its combination of domestic and foreign policy activism, with the government learning quickly under pressure to respond to the Strait of Hormuz crisis [4]. The real test will be whether Indonesia can effectively implement its new energy playbook and reduce its dependence on foreign energy sources, with the country's energy security hanging in the balance as it consumes 1.52 million barrels of oil per day.