Jakarta. The government's decision to strip Pertamina of its longstanding role as Indonesia's main oil and gas importer and transfer procurement authority to Lemigas carries significant risks, an energy expert has warned.

Lemigas, an agency under the Energy and Mineral Resources Ministry, has little experience in international trading, shipping logistics or managing currency and oil price fluctuations.

Previously tasked with importing Russian crude earlier this year, Lemigas recently received broader authority to procure crude oil, fuel and liquefied petroleum gas (LPG).

Energy Minister Bahlil Lahadalia said procurement would shift from business-to-business (B2B) tenders to government-to-government (G2G) and government-to-business (G2B) arrangements, with Lemigas operating as a public service agency.

Gadjah Mada University energy expert Fahmy Radhi questioned the move, arguing that Pertamina was better equipped to manage complex international transactions.

"In my view, this is not the right decision," Fahmy told the Jakarta Globe.

He warned that disputes with foreign suppliers could expose state assets to arbitration risks, while Lemigas' limited experience in selecting suppliers, chartering vessels and arranging shipments could delay crude deliveries to Pertamina's refineries.

"This could slow the process and add another layer to the supply chain," he said.

Lemigas has traditionally focused on laboratory testing, calibration, certification and oil and gas technology research rather than international commodity trading.

The relatively little-known agency appointed Muhammad Iksan Kiat as its new head in August after operating under acting leadership since its previous chief retired in late 2025.

Pertamina has pledged to comply with the government's directives.

Despite the concerns, the Indonesian Energy, Mineral and Coal Suppliers Association (Aspebindo) supports the transition, although its chairman, Anggawira, stressed that Pertamina should remain involved.

"Lemigas needs adequate technical capacity and risk management. Pertamina should also be involved according to its operational expertise to ensure the changes do not increase costs or slow supplies," Anggawira wrote in an opinion article.

He said the new mechanism reflects the government's intention to negotiate more directly with suppliers, potentially improving efficiency, transparency and national energy security.

"The success of this policy must be measurable: more secure supplies, competitive procurement prices, reduced dependence on particular suppliers or routes, and an accountable process," he said.

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