Jakarta. Indonesia plans to build new energy storage facilities capable of covering up to three months of national demand, as the government seeks to strengthen energy security amid rising geopolitical tensions.

Energy and Mineral Resources Minister Bahlil Lahadalia said Indonesia’s effective energy reserves currently last only about 25 to 26 days, highlighting structural vulnerabilities in the country’s supply buffer.

“In reality, our energy resilience stands at a maximum of 25–26 days, no more than that,” Bahlil said at a press conference in Jakarta on Tuesday.

While existing stocks of fuel, crude oil, and liquefied petroleum gas (LPG) remain above minimum safety thresholds, national storage capacity is limited. A prolonged global supply disruption would quickly strain domestic reserves.

The issue has gained urgency following heightened geopolitical risks in the Middle East, including disruptions around the Strait of Hormuz linked to conflict involving Israel, the United States, and Iran — a key artery for global energy shipments.

To mitigate the risk, the government is preparing to construct new storage facilities with a capacity sufficient to sustain domestic demand for up to three months.

“The government is now working to build storage with capacity reaching up to three months,” Bahlil said, adding that construction is expected to begin this year in Sumatra. He did not provide further details on project scale or investment value.

The minister stressed that the project cannot be delayed, as it concerns national energy supply security.

Subsidy Pressures Mount
Indonesia’s crude oil production remains around 600,000 barrels per day (bpd), well below domestic consumption levels, making the country a net oil importer.

At the same time, the government continues to subsidize lower-grade gasoline and diesel, exposing the state budget to higher fiscal pressures when global oil prices rise.

Brent crude has climbed to around $80 per barrel amid the ongoing Iran conflict, prompting the government to assess the impact on energy subsidy spending.

“Higher oil prices increase the subsidy burden borne by the state,” Bahlil said.

However, he noted that elevated crude prices also lift government revenue from Indonesia’s own oil output of more than 600,000 bpd.

The government is now calculating the net fiscal impact, weighing additional revenue against potential increases in subsidy outlays. President Prabowo Subianto has instructed that energy policies be carefully assessed to ensure both supply security and fiscal prudence.

“We must be very cautious in calculating everything, while ensuring domestic fuel availability to provide certainty and service to our people,” Bahlil said.