Indonesia to cut fuel imports with biofuel push

Indonesia is strategically moving to curb its reliance on foreign energy by significantly reducing fuel imports, a policy that has drawn criticism from some importers, according to Minister of Energy and Mineral Resources Bahlil Lahadalia.

Lahadalia stated that the nation's annual fuel consumption stands at 40 million kiloliters, with domestic production meeting only half of that demand. To bridge this gap, Indonesia currently imports approximately 20 million kiloliters of fuel. "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," Lahadalia declared at the INDEF Mid-Year Study Seminar 2026 in Central Jakarta.

The government is exploring a multi-pronged approach. While domestic oil production is still insufficient, there's a push to convert some energy demand to bioenergy. Building on the success of the B50 biodiesel program, Indonesia plans to implement a 20 percent ethanol (E20) fuel mix by 2028. This initiative is projected to slash fuel imports by up to 4 million kiloliters each year.

Lahadalia highlighted that countries like the United States and Brazil have already adopted similar ethanol blending policies. He emphasized that this strategy is crucial not only for reducing import volumes but also for stemming the continuous outflow of foreign exchange, which amounts to approximately $30 billion annually. The policy is also expected to bolster the stability of the Indonesian rupiah.

Beyond biofuels, Indonesia is considering alternative international trade mechanisms that do not rely on the US dollar, aiming to further diversify its economic dependencies. These measures collectively signal a strong commitment to energy self-sufficiency and economic resilience.

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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.