Jakarta. Indonesia is preparing to reduce its reliance on fuel imports from Singapore, citing high prices and geopolitical concerns, Energy and Mineral Resources Minister Bahlil Lahadalia said Friday.

Speaking in Jakarta, Bahlil revealed that Indonesia aims to gradually shift its fuel import sources from Singapore, which currently accounts for 54–59 percent of the country’s imported fuel,  to suppliers in the Middle East, where prices are more competitive.

“We’re starting to think that we should import oil from other countries, not from Singapore,” Bahlil said, as quoted by state news agency Antara. “Why should it be more expensive from a country so close to us? It should be cheaper.”

Despite Singapore’s proximity, the cost of importing fuel from the city-state is comparable to imports from the Middle East. This pricing mismatch and broader geopolitical and geo-economic considerations have led Jakarta to seek a more diversified and balanced import strategy.

Indonesia depends heavily on imported fuel, with domestic oil production currently at around 600,000 barrels per day, far short of its daily consumption exceeding 1 million barrels. Singapore, a major refining and trading hub, does not produce crude oil itself but re-exports refined products.

To support the transition, the government plans to build larger port facilities capable of accommodating bigger tankers. Currently, smaller vessels are used for shipments from Singapore, driving up transportation and logistics costs.

“One of the reasons we’re expanding our ports is to allow for one-time large-volume shipments,” Bahlil said. “That means deeper and wider berths.”

This move complements earlier plans announced in December to construct a national oil storage reserve on an island near Singapore. The facility will be used by state-owned energy firm Pertamina to stockpile crude oil, allowing the company to buy in bulk and avoid costly spot market fluctuations.

By reducing reliance on third-party storage and intermediaries, the new strategy aims to improve procurement efficiency and lower overall import costs.

Indonesia’s crude production has declined steadily from 707,000 barrels per day in 2020 to about 600,000 barrels currently. In response, the government has set a production target of 900,000 to 1 million barrels per day by 2029 by utilizing idle wells, in a bid to return to output levels last seen during the country's peak as a member of OPEC in the 1990s.

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