Jakarta. Two executives of Pertamina Patra Niaga, a subsidiary of state-run oil company Pertamina, were named suspects on Wednesday evening in a corruption investigation that prosecutors estimate has cost the state $11.9 billion. Their inclusion brings the total number of suspects in the case to nine.

The newly charged executives are Central Marketing Director Maya Kusmaya and Vice President for Trading Operation Edward Corne. Both were questioned at the Attorney General’s Office (AGO) until after 10 p.m. on Wednesday before prosecutors decided to detain them.

AGO Director of Corruption Investigation Abdul Qohar told a news conference that Maya and Edward had been summoned as witnesses for depositions at 10 a.m. but failed to appear until 2 p.m. 

“Accordingly, investigators took the initiative to locate their whereabouts and took them in for questioning,” Abdul said. After the interrogation, investigators “found incriminating evidence that they had conspired to commit the crime with seven other suspects already in our custody,” he added.

Illegal Crude Oil Imports and Fuel Blending
Prosecutors allege that all nine suspects illegally imported crude oil to supply Pertamina’s refineries, despite government restrictions, and fraudulently blended the higher-octane Pertamax fuel with lower-quality gasoline for public sale between 2018 and 2023.

Pertamina executives allegedly devised excuses to reject locally sourced crude, allowing them to import oil and reap gains from inflated shipping fares and other fraudulent schemes. Because the local crude was turned away, it had to be sold on export markets at lower prices -- even though the government has repeatedly mandated the use of domestic crude oil for national fuel needs.

Seven suspects had been named earlier in this high-profile scandal, including four executives from Pertamina subsidiaries:

• Riva Siahaan (CEO of Pertamina Patra Niaga)
• Yoki Firnandi (CEO of Pertamina International Shipping)
• Sani Dinar Saifuddin (Feedstock and Product Optimization Director at Kilang Pertamina Internasional)
• Agus Purwono (Vice President for Feedstock Management at Kilang Pertamina Internasional)

Three others are from private companies:

• Muhammad Kerry Andrianto Riza, the beneficial owner of oil shipping company Navigator Khatulistiwa
• Dimas Werhaspati, commissioner of Navigator Khatulistiwa and Jenggala Maritim
• Gading Ramadhan Joedo, commissioner of Jenggala Maritim and CEO of Orbit Terminal Merak

Massive State Losses
According to the AGO, the scandal has cost the state an estimated Rp 193.7 trillion (about $11.9 billion). These staggering losses arose from a mix of using imported oil instead of cheaper domestic crude, inflated shipping rates, increased production costs that consumed government subsidies, and several other factors. 

Prosecutors broke down the losses as follows:

• Rp 126 trillion in government compensation payments due to higher fuel production costs
• Rp 35 trillion in crude oil export losses (since local crude was sold abroad at lower prices)
• Rp 21 trillion in additional government subsidies
• Rp 9 trillion in refined fuel import costs via brokers
• Rp 2.7 trillion in crude oil import costs via brokers

Prosecutors said the scheme benefited both Pertamina executives and their private partners. They allege Kerry Riza secured crude oil supply contracts without a proper bidding process, while Yoki Firnandi inflated shipping fees, prompting the government to pay 13-15 percent above standard rates to Pertamina International Shipping.

Another aspect of the probe involves accusations that Pertamina Patra Niaga blended subsidized, lower-grade gasoline with Pertamax -- a fuel sold without subsidies and touted as having a higher octane number.

Two CEOs Implicated
Two of the main suspects, Riva Siahaan (Pertamina Patra Niaga CEO) and Yoki Firnandi (Pertamina International Shipping CEO), were arrested two days prior to the detention of Maya Kusmaya and Edward Corne. 

During a press briefing on Monday, Abdul explained that since 2018, the government has required Pertamina to prioritize local crude for its refineries before importing. However, Riva allegedly conspired with executives at Kilang Pertamina Internasional -- responsible for refining crude into fuel -- to reject domestic oil on the grounds of uncompetitive prices and below-standard quality.

In reality, Abdul said, local crude oil meets refining standards and is more affordable than imported oil. “The rejection of local crude at that time led to exports of Indonesian crude,” he said. 

Meanwhile, Pertamina refineries imported oil at a substantially higher cost under what prosecutors describe as a fraudulent scheme involving Pertamina executives and their private-sector partners. These brokers, appointed without an open bidding process, allegedly set artificially high prices.

Moreover, shipping costs were inflated under the direction of Yoki, forcing the government to pay an extra 13-15 percent in fees. Consequently, Pertamina’s production costs surged, compelling the state to cover around Rp 126 trillion in compensation alone.