Government Strategies to Prevent a Fuel Crisis in Indonesia
While the Philippines declared an energy crisis two weeks ago, it seems that matters in Indonesia remain under control. So far, there haven't been long queues at gas stations (to hoard fuels), while government officials repeatedly ensure that there is enough fuel available for society, although people are encouraged to cut back on fuel consumption (for example, by working-from-home once a week).
In fact, the Prabowo Subianto administration did not even change prices of subsidized fuels at the start of April 2026. This came as a surprise to many because the government's budget deficit is set to widen significantly, possibly even well beyond the legal mandate of 3 percent gross domestic product (GDP), something that could trigger a rating downgrade. And, if (at least) two of the big international credit rating agencies (such as Fitch Ratings and Moody's Investors Service) slash Indonesia's investment grade status, then the country is bound to see massive capital outflows that will push the rupiah and benchmark stock exchange to scary levels.
Therefore, by not adjusting the prices at the gas stations, the cabinet is certainly taking a risk. Of course, it would probably have to face a lot of criticism (perhaps even large-scale demonstrations) and a loss in purchasing power across society if it had raised prices of Pertalite (which is the most widely used fuel in Indonesian society) and Pertamax (which is partly 'subsidized' by the government as this fuel is sold under the market price in Indonesia, and therefore state-owned energy company Pertamina receives generous compensation transfers from the state budget, each year). However, by risking a severe deterioration of the fiscal/financial economy (in an effort to protect the real economy), this can at a certain point disrupt the real economy (and in a heavy manner, if the cabinet is not careful).
Tackling the issue of skyrocketing crude oil prices, Indonesia's Ministry of Energy and Mineral Resources confirmed that the cabinet is keeping all options on the table to maintain national energy security. While current domestic fuel reserves are sufficient, Energy and Mineral Resources Minister Bahlil Lahadalia noted that the government is exploring the possibility of importing crude oil and fuel from Russia (this is possible because the US government, temporarily, waved a sanction on buying Russian oil), although a final decision still needs to be made.
"We are currently in a position where we are always open to options from any country. We aren't being picky; the priority for the government is ensuring that fuel remains available in Indonesia," Bahlil stated on Monday (6 April 2026).
Beyond Russia, the government is also scouting for Liquefied Petroleum Gas (LPG) supplies from the Middle East, the United States, and Australia. Bahlil admitted that the global energy market has become hyper-competitive, noting instances where tendered goods were snatched up by higher bidders at the last minute.
Indonesian Finance Minister Purbaya Yudhi Sadewa stated that subsidized fuel prices will not increase until the end of 2026, explaining that the State Budget (APBN) remains a capable "shock absorber," even if oil prices hover between USD $80 and $100 per barrel (average) throughout the year. This is in fact a bold statement, and one that worries analysts.
However, OPEC+ recently released a statement emphasizing that it will require a long time before damaged energy infrastructure in the Middle East becomes fully operational again, implying there will be long-lasting supply and distribution trouble. This would mean pressures on the budget balance are to stay for a prolonged period of time. After all, Indonesia is a net oil importer.
Despite the government's optimism, Muhammad Ishak Razak, a Senior Economist at CORE Indonesia, warned that the country remains highly sensitive to global prices as Indonesia is highly dependent on imports of oil and fuel. Indonesia consumes around 1.5–1.6 million barrels per day, of which nearly 50 percent is met through imports of crude and refined products. Moreover, the 2026 State Budget was pegged at an oil price of USD $70 per barrel, while market prices have recently surged toward USD $113 per barrel. This puts a great burden on energy subsidy and compensation spending.
Razak therefore argues that the current challenging situation should make the government reconsider its energy subsidy model, preferably shifting toward targeted subsidies for low-income citizens to prevent the wealthy from benefiting the state subsidies and to reduce the fiscal burden.
Table 1 reveals that Indonesia imports most crude oil from Nigeria and Angola (while Brazil and Australia are also important suppliers). Only on third position comes Saudi Arabia. One can imagine that -for Indonesia- it is particularly the crude oil shipments from Saudi Arabia that are affected by the Iran War (as the Strait of Hormuz, which handles around 20 percent of the world's oil, has been largely closed off).
Table 1; Crude Oil Imports into Indonesia (Top Sources):
| Source Country | Import Volume (in million tons) |
| Nigeria | 4.63 |
| Angola | 3.74 |
| Saudi Arabia | 3.19 |
| Brazil | 1.66 |
| Australia | 1.27 |
Source: dataIndonesia.id
However, it is important to emphasize that in terms of imports of fuels, Indonesia obtains most of the supplies from Singapore and Malaysia. The reason why this can become a problem for Indonesia is that these refineries in Singapore and Malaysia get their crude mostly from the Middle East. Moreover, besides the direct impact from the Iran War (in the form of troubled imports), Indonesia also experiences the indirect impact through skyrocketing oil prices and insurance/logistics costs.
Table 2; Fuel Imports into Indonesia (Top Sources):
| Source Country | Import Volume (percentage of total) |
| Singapore | 38.8% |
| Malaysia | 20.8% |
| United Arab Emirates | 4.6% |
| Saudi Arabia | 4.2% |
| Qatar | 3.5% |
| China | 2.2% |
| Kuwait | 1.2% |
Source: dataIndonesia.id
To ease the rising pressures on the state budget, the Prabowo Subianto cabinet announced a number of strategies that particularly aim at reducing fuel consumption across Indonesia:
- Mandatory Work from Home (WFH); as of 1 April 2026, the government has mandated WFH for civil servants every Friday. Additionally, state-owned enterprises and private companies are strongly encouraged to implement WFH at least one day a week, which is estimated to save up to 20 percent in national fuel consumption.
- Daily purchase quotas; to prevent hoarding and control demand, the government has imposed a strict limit on purchases of subsidized fuel (Pertalite and Biosolar). Private passenger cars are restricted to 50 liters per day, while public transport and logistics vehicles have separate, slightly higher caps (at 80 liters and 200 liters, respectively).
- Digital subsidy targeting (through MyPertamina); the government is accelerating the use of digital tracking systems to ensure subsidies are target-oriented. Only vehicles registered and verified via the MyPertamina platform, which is cross-referenced with social welfare data, can access subsidized fuel.
- Shift to public transport; there is an aggressive push to move commuters from private vehicles to mass transit systems like the MRT, LRT, and TransJakarta. The Ministry of Energy and Mineral Resources notes that a full shift to public transport can reduce individual fuel expenses and national consumption by roughly 30 percent.
- Travel budget cuts for government officials; a new directive limits non-essential official travel. Government agencies are now required to prioritize virtual meetings over physical travel to reduce state spending on fuel.
- Induction stove program; to reduce the consumption of LPG (which is tied to the oil and gas trade balance), the government is subsidizing the transition to electric induction stoves for millions of households, shifting the energy burden from imported fuel to the domestic power grid.
- On-site monitoring and enforcement; BPH Migas (the monitoring body) has increased field inspections at gas stations around Indonesia to ensure that the daily purchase quotas purchase rule is enforced through license plate scanning technology.
In sum, the Indonesian government takes a risky decision by not raising fuel prices as this may trigger a ballooning deficit (in case global oil prices remain high for a long period) and would then risk losing the investment grade status. It did announce a couple of strategies to curb fuel consumption in Indonesian society. However, people will only truly reduce fuel consumption if they feel it in their wallets.