Balikpapan, E. Kalimantan. Indonesia will stop importing diesel fuel in 2026 as output from the newly upgraded Balikpapan refinery pushes domestic supply into surplus, Energy and Mineral Resources Minister Bahlil Lahadalia said during the refinery inauguration on Monday.

Bahlil said state oil and gas company Pertamina's Balikpapan Refinery in East Kalimantan will generate a diesel surplus of 3 million to 4 million kiloliters a year, allowing the country to fully rely on domestic production.

“We will no longer import diesel,” Bahlil said during a visit to Pertamina’s Refinery Unit V in Balikpapan.

He added that the government will no longer issue permits to import diesel starting this year, including for private fuel retailers, such as Shell and BP. Any diesel cargoes that still arrive in January or February 2026, he said, will be part of import contracts approved in 2025.

“Starting this year, I will no longer issue diesel import permits. There will be no new diesel import licenses,” Bahlil said. “If there are still shipments early next year, those are simply the realization of permits issued last year.”

The Balikpapan project, valued at $7.4 billion or around Rp 123 trillion, is the largest refinery revitalization project in Indonesia’s history. Covering more than 80 hectares, it is a cornerstone of the government’s strategy to modernize downstream energy infrastructure and reduce dependence on fuel imports.

The upgrade lifts the refinery’s processing capacity from about 260,000 barrels per day to 360,000 barrels per day — equivalent to roughly a quarter of Indonesia’s total fuel demand. The increase is expected to sharply reduce imports, particularly diesel, which has been a major drag on the country’s trade balance.

According to the Energy Ministry, the Balikpapan refinery could save Indonesia up to Rp 68 trillion annually in fuel import costs. Its broader economic impact is projected to reach Rp 514 trillion in cumulative contributions to gross domestic product.

Beyond higher volumes, the refinery will also produce higher-quality fuels. The upgraded facility is capable of producing diesel, gasoline, jet fuel, and liquefied petroleum gas (LPG), with specifications improved from Euro II to Euro V standards, making the fuels cleaner and more environmentally friendly.

“With this refinery, we are not just increasing capacity,” Bahlil said. “We are strengthening Indonesia’s energy independence.”