Indonesia replaces energy tenders with direct procurement arrangements
A new Public Service Agency will negotiate energy supply agreements with foreign governments and producers under Presidential Regulation No. 107 of 2026.
Indonesia has adopted Presidential Regulation No. 107 of 2026 to change how it procures crude oil, fuel and liquefied petroleum gas (LPG), officials announced. The framework replaces conventional commercial tenders with government-to-government and government-to-business arrangements.
Coordinating Minister for Downstreaming and Energy Transition Bahlil Lahadalia said the change moves procurement away from the business-to-business model used by state-owned PT Pertamina. A designated Public Service Agency will be established to negotiate and conclude direct supply agreements.
Lahadalia said Pertamina’s tender process often took considerable time and exposed supply agreements to cancellation when competing buyers offered suppliers more money.
On Indonesia’s supply position, he said the country currently imports no crude oil from the Middle East. Imports from the United States account for approximately 85 per cent of national LPG demand, he added.
Indonesia is fully self-sufficient in diesel production, according to Lahadalia, but still needs imports of Pertalite (RON 90) and higher-octane petrol to meet domestic demand.
The minister also said fuel reserves meet the government’s minimum requirements despite volatility in global energy markets. Subsidised fuel prices will stay unchanged on President Prabowo Subianto’s instructions, he said.
