The Indonesian government is intensifying efforts to reduce reliance on imported energy, which has long placed pressure on the nation’s foreign exchange reserves. A key strategy being accelerated is the fuel blending policy, which mixes fossil fuels with plant-based energy sources such as biodiesel and ethanol.
Minister of Energy and Mineral Resources Bahlil Lahadalia said on Thursday, October 30, that Indonesia’s annual energy imports have reached Rp520 trillion (USD 31.23 billion) — a significant burden on the country’s foreign reserves. The government views the blending policy as an essential step toward reducing import dependency while enhancing energy security and self-sufficiency.
“Every year, we lose Rp520 trillion to purchase energy raw materials from abroad. The Indonesian people’s money is actually being used to enrich other countries,” Bahlil said.
Resistance from Import-Dependent Businesses
Bahlil noted that some business groups remain resistant to the policy shift, preferring to maintain existing import practices because they benefit from the import quota system.
“Those who want imports to continue are the parties who are too comfortable with the system. They enjoy large margins from import activities,” he stated.
Despite such resistance, Bahlil emphasized that President Prabowo Subianto’s administration is committed to reducing foreign energy dependence, consistent with the government’s broader energy independence and downstreaming agenda.
He highlighted the progress already achieved through the biodiesel program, explaining that before its implementation, Indonesia imported around 34 million tons of diesel fuel per year. After the introduction of the B10–B40 blending programs, imports fell sharply to around 4.9 million barrels annually.
According to Bahlil, the biodiesel initiative not only reduces imports but also strengthens the domestic palm oil industry, which supplies the main raw material for biodiesel production.
Expanding to Ethanol and DME Initiatives
Following biodiesel, the government is preparing to launch ethanol blending in gasoline under the E10 scheme, which uses a 10 percent ethanol mix. This program aims to reduce gasoline imports and stimulate the domestic bioethanol industry, leveraging local feedstocks such as sugarcane and cassava.
In addition, the government is developing a strategy to substitute liquefied natural gas (LNG) imports with Dimethyl Ether (DME), a fuel derived from domestic coal downstreaming.
Roadmap Toward Energy Transition and Sovereignty
The fuel blending and downstreaming initiatives form part of a broader national energy transition roadmap, designed to enhance energy security and sovereignty. By increasing the use of domestically sourced energy, the government aims to narrow the energy trade deficit, strengthen local industries, and create new employment opportunities.
Through these measures, Indonesia seeks to build a more resilient and sustainable energy system while advancing its long-term goal of national self-reliance in the energy sector.
