Indonesia’s recent move to tighten control over private fuel imports has reignited debate over how far the government should go in protecting its domestic energy market. The policy, led by Energy Minister Bahlil Lahadalia, is officially framed as part of an effort to safeguard national energy sovereignty.

According to Bisnis.com, supporters, including senior figures in the ruling Golkar Party, argue that fuel is a strategic commodity that deserves strict regulation. They claim that limiting import rights and giving Pertamina a central role helps maintain stability in the domestic market and prevents overreliance on foreign suppliers. Government officials have also justified the measure by pointing to shortages earlier this year, even after private distributors exceeded 110% of their import quotas.

The Ministry of Energy and Mineral Resources (ESDM) maintains that coordination with Pertamina is necessary to guarantee steady supplies, ensure pricing consistency and protect the national interest. But critics argue that this approach risks tilting the balance too far towards state control, squeezing competition and potentially discouraging private investment.

Import restrictions trigger closure of private fuel stations

In recent weeks, public concern has grown following the temporary closure of several private petrol stations, including BP-AKR and Vivo, after the government restricted fuel imports. According to BBC Indonesia, the closures stemmed from a new policy requiring private distributors to purchase fuel directly from Pertamina rather than import independently.

The move followed the ministry’s announcement that only Pertamina would be permitted to import fuel for the remainder of 2025, citing supply coordination and efficiency reasons. The restriction effectively halted operations at several private stations that relied on imported base fuel, sparking consumer frustration and a wave of online criticism about reduced access and higher prices.

Many employees at the affected stations have reportedly lost their jobs, highlighting the broader economic consequences of the policy. For smaller operators, this development has deepened uncertainty about the government’s long-term direction in the downstream energy sector.

According to Tirto.id, private distributors Vivo and BP-AKR had initially agreed to purchase 40,000 barrels of base fuel from Pertamina to maintain supply. However, both companies withdrew from the deal after learning that Pertamina’s base fuel contained 3.5% ethanol. Although the ethanol level is well within Indonesia’s regulatory limit of 20%, the companies cited concerns about compatibility and fuel quality.

Achmad Muchtasyar, Deputy President Director of Pertamina Patra Niaga, confirmed during a parliamentary hearing that “Vivo decided not to continue the purchase agreement” and that “BP-AKR also did not proceed.” He added that negotiations with Shell Indonesia had not advanced due to “internal bureaucracy within the company.”

The withdrawal has left Pertamina as the sole major supplier, raising concerns over the lack of viable alternatives for private fuel retailers. The government’s insistence on routing all supply through Pertamina has drawn criticism from both economists and energy policy experts, who argue that it may weaken Indonesia’s competitive landscape.

Government denies monopoly allegations

Amid mounting criticism, BBC Indonesia reports that the Ministry of Energy and Mineral Resources rejected claims that the new import rule amounts to a monopoly. Officials stated that private operators are free to apply for import quotas for 2026. According to the ministry’s spokesperson, Dwi Anggia, “There is no such thing as a one-gate import system. Each company can import its own fuel as long as it obtains approval from the ministry.”

Director General of Oil and Gas, Laode Sulaeman, said several companies had already submitted their import data for next year. This information, he explained, would be used as the basis for determining 2026 import quotas. The ministry insists that the process aims to improve transparency and strengthen energy security rather than limit private sector participation.

Energy analysts remain split. As reported by Tirto.id, Fabby Tumiwa of the Institute for Essential Services Reform warned that the restriction could distort competition and disrupt supply chains. He urged the ministry to focus instead on improving domestic fuel quality to Euro 4 standards. According to Fabby, limiting private access undermines the goal of energy security and self-sufficiency.

Others take a more favourable view. Public policy expert Trubus Rahardiansah argued that the current import quota, already raised to 110% of 2024 levels, offers flexibility. He said the measure prevents fragmented imports and price disparities while maintaining a fair balance between private participation and national interest.

While the government promises a fairer and more transparent quota system in 2026, uncertainty lingers. The policy has raised questions about Indonesia’s ability to balance state control with market openness at a time when energy demand continues to grow.

According to Tirto.id, private operators remain cautious, noting that sudden policy shifts could make it harder to plan investments or manage operational risks. Foreign fuel brands that once viewed Indonesia as an expanding market now face higher barriers to entry, both regulatory and logistical.

Governance and market confidence

Beyond the issue of fuel supply, the debate reflects deeper concerns about governance, trust and investor confidence. The controversy has unsettled consumers already wary of Pertamina’s reputation after a corruption case earlier in 2025. 

The perception that the government is tightening its grip on strategic industries could deter long-term investment and innovation. For Indonesia, the challenge lies in maintaining control over vital resources while still projecting an image of reliability and openness to investors.

The fuel import policy, therefore, is more than a question of logistics or supply. It is a test of whether Indonesia can strike a sustainable balance between national sovereignty and market confidence without sidelining private players who have helped energise its economy.