RI revamps energy procurement rules under new presidential order

Jakarta (ANTARA) - Indonesia has officially overhauled its procurement framework for crude oil, fuel, and liquefied petroleum gas (LPG) under a new presidential regulation designed to streamline sourcing and safeguard national energy security, officials announced Monday.

Under Presidential Regulation No. 107 of 2026, the government will bypass conventional commercial tender processes, shifting from state-owned enterprise PT Pertamina’s business-to-business (B2B) model toward government-to-government (G2G) and government-to-business (G2B) arrangements.

"Presidential Regulation 107 represents a new phase in the procurement system for crude oil, fuel and LPG for our country," Coordinating Minister for Downstreaming and Energy Transition Bahlil Lahadalia told reporters in Jakarta.

Lahadalia explained that traditional commercial tenders managed by Pertamina were frequently time-consuming and vulnerable to third-party outbidding, leaving national supply deals exposed to sudden cancellation when suppliers received higher offers.

To execute the new framework, the government will establish a designated Public Service Agency to negotiate and finalize direct energy agreements with foreign governments and producers.

Detailing national supply metrics, Lahadalia stated that Indonesia currently imports no crude oil from the Middle East, while approximately 85 percent of national LPG demand remains reliant on imports from the United States.

Domestically, Indonesia has attained complete self-sufficiency in diesel fuel production, though imports remain necessary to fulfill national requirements for Pertalite (RON 90) and higher-octane gasoline grades.

Despite ongoing global energy market volatility, the minister confirmed that domestic fuel reserves meet state minimum requirements, affirming that prices for subsidized fuels will remain unchanged under direct instruction from President Prabowo Subianto.

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Translator: Ahmad Muzdaffar Fauzan, Yashinta Difa
Editor: Aditya Eko Sigit Wicaksono
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