Indonesia fast-tracks oil and gas rules to cut import dependence

Jakarta (ANTARA) - The Energy and Mineral Resources (ESDM) Ministry is fast-tracking regulations on unconventional oil and gas regulations for June completion, aiming to boost domestic production and shield Indonesia’s economy from a weakening rupiah.

“(Upstream oil and gas regulator) SKK Migas has requested that the regulatory framework be completed by the end of June and implemented in early July," ESDM Deputy Minister Yuliot said here on Friday.

The policy push comes at a critical time for Indonesia's currency. On Friday morning, the rupiah slipped by 17 points, or 0.09 percent, trading at Rp18,066 per US dollar compared to its previous close of Rp18,049.

A weaker rupiah significantly increases the cost of Indonesia’s energy imports. Data from the National Energy Council (DEN) highlights Indonesia's severe exposure to global currency fluctuations and supply chains.

The country currently consumes around 1.52 million barrels of oil per day, while domestic production languishes at just 610,000 barrels per day—forcing the country to rely heavily on foreign crude to fill the gap deficit.

The situation is similarly acute for Liquified Petroleum Gas (LPG). For the full year of 2026, national LPG demand is projected to hit 10 million tons, an overwhelming 7.8 million tons of which an overwhelming 7.8 million tons must be imported.

By unlocking unconventional oil and gas reserves, the Indonesian government hopes to actively reverse this dependency, according to Yuliot.

"If domestic production increases, it means we will also reduce imports and will be less affected by currency changes or fluctuations," he explained.

While a ministerial decree governing unconventional energy resources already exists, the ministry noted that the current framework is ineffective in driving investment at scale.

The ministry’s Director General of Oil and Gas Laode Sulaeman confirmed that targeted revisions are underway to streamline operations and offer stronger institutional backing to the state-owned energy giant PT Pertamina.

"There are several things we need to revise to strengthen support for Pertamina," Sulaeman stated.

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Translator: Putu Indah Savitri, Yashinta Difa

Editor: M Razi Rahman

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