Jakarta. Indonesia is overhauling its energy import system by shifting procurement of crude oil, refined petroleum products, and liquefied petroleum gas (LPG) from state-owned energy company Pertamina's traditional commercial arrangements to direct government-led negotiations with overseas suppliers.

Energy and Mineral Resources Minister Bahlil Lahadalia said Monday that the changes, introduced under Presidential Regulation No. 107 of 2026, would allow Indonesia to secure energy supplies through government-to-government (G2G) and government-to-business (G2B) agreements.

The new mechanism is intended to improve supply security and reduce the risk of disruptions in meeting domestic energy demand, he said.

Bahlil described the regulation, signed by President Prabowo Subianto, as a new chapter in Indonesia's energy procurement system.

"Previously, Pertamina conducted business-to-business transactions, and the tender process could take a long time. Under this presidential regulation, we are moving to G2G and G2B arrangements, allowing us to determine which countries will supply our energy needs," Bahlil said at his office in Jakarta.

According to Bahlil, the change was prompted by difficulties Pertamina had encountered in securing supplies through conventional procurement procedures.

He said there had been cases in which Pertamina negotiated competitive prices but subsequently lost access to supplies because sellers chose other buyers willing to pay more.

Under the new arrangement, the Indonesian government will negotiate directly with supplying countries, while procurement will be carried out by a designated public service agency, known as a Badan Layanan Umum (BLU).

Pertamina will then purchase the imported energy products from the agency, Bahlil explained.

The government expects the mechanism to shorten procurement chains and reduce reliance on intermediaries.

However, the regulation still allows Pertamina to import energy products directly under certain circumstances, including when national reserves fall to critically low levels or geopolitical disruptions affect supplies from producing countries.

Such purchases must be coordinated with the designated BLU.

Indonesia Remains Dependent on Energy Imports
The policy shift comes as Indonesia continues to rely on imports to meet a substantial share of its domestic energy needs.

The country still imports crude oil, although its supply sources have become less concentrated in the Middle East.

Indonesia also relies heavily on imported LPG, with around 80% of its domestic requirements met through overseas purchases, according to the figures cited by the government. The United States is a major supplier.

Meanwhile, Indonesia has stopped importing certain lower-grade diesel products but continues to import gasoline, including RON 90, marketed domestically as Pertalite, as well as some higher-octane grades such as RON 92, RON 95 and RON 98.

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