Jakarta. The Indonesian government plans to restrict crude oil exports this year to maximize the utilization of local refineries and ensure sufficient fuel supply for domestic consumption.

Energy and Mineral Resources Minister Bahlil Lahadalia announced earlier this week that nearly half of the projected crude oil exports -- approximately 28 million barrels -- will be redirected to the domestic processing industry.

"In line with President Prabowo [Subianto]’s directives, we have instructed domestic refineries to absorb all available crude oil, including lower-grade output that was previously rejected, to minimize exports," Bahlil said in a statement.

He noted that Indonesia’s major refineries in Balikpapan, Cilacap, and Dumai are now capable of processing a wider range of crude oil, including below-standard varieties. Additionally, the government is accelerating the construction of new refineries in Tuban and Balongan to further enhance domestic production capacity in the coming years.

As part of this initiative, the government will allocate up to 13 million barrels of crude oil, originally intended for export, to supply local refineries.

In the first half of 2024, Indonesia’s crude oil production averaged 578,272 barrels per day (bpd), slightly lower than the 605,000 bpd recorded during the same period in 2023.

During the early 1990s, Indonesia was a major oil producer and a key member of OPEC, with crude exports averaging 1 million bpd. However, declining production over the years has led the country to prioritize domestic needs over exports.