Indonesia Adjusts Crude Oil and LPG Import Procurement System

en.Wedoany.com Reported - On October 26, Indonesia's Ministry of Energy and Mineral Resources introduced the new procurement mechanism for crude oil, refined oil products, and liquefied petroleum gas (LPG) imports under Presidential Regulation No. 107 at a press conference held in Jakarta. The procurement method has shifted from inter-enterprise tendering led by Indonesia's state oil company Pertamina to direct government-to-government cooperation and government-to-enterprise cooperation, with a government-designated public service agency responsible for centralized procurement.

Under the new procurement arrangements, the Indonesian government will negotiate directly with energy-supplying countries to establish supply cooperation for crude oil, refined oil products, and LPG, after which the designated public service agency (BLU) will execute the procurement. Pertamina will purchase imported energy products from this agency, and the original inter-enterprise commercial tendering will no longer be the primary procurement channel.

Indonesian Minister of Energy and Mineral Resources Bahlil Lahadalia explained at the October 26 press conference that the original tendering process was time-consuming, and some procurement arrangements that had already obtained lower bids were affected when suppliers turned to other buyers offering higher prices. The government plans to determine supply sources and procurement arrangements through direct negotiations and to seek long-term supply contracts.

According to the implementation arrangements announced by the Ministry of Energy and Mineral Resources, when national energy reserves fall to a low level or in special circumstances such as geopolitical conflicts in source supply countries, Pertamina may still directly import relevant energy products, but must coordinate with the designated public service agency.

The supply structure announced by the Indonesian government shows that domestic LPG demand remains highly dependent on imports, with approximately 80% coming from the United States. Diesel has essentially achieved domestic self-sufficiency, but RON 90 gasoline and some RON 92, RON 95, and RON 98 gasoline still require imports. Bahlil plans to visit countries including India and China to conduct energy supply negotiations and secure long-term supply arrangements.