Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia recently warned private fuel stations (SPBUs) to comply with government regulations or face consequences, including potential closure. The statement came following a stalled agreement on fuel purchases between Pertamina and private gas stations.
When fuel shortages occurred at private gas stations, the minister offered an option for them to buy fuel from Pertamina under the single-gate import policy.
However, most private operators reportedly refused to purchase Pertamina’s fuel, citing the 3.5 percent ethanol blend in the base fuel as a concern.
Considering that companies such as Shell and BP sell fuels blended with up to 10 percent ethanol in the United States and Europe, the 3.5 percent ethanol content should not be a valid reason for rejecting Pertamina’s supply.
The prolonged disagreement, therefore, is suspected to be a pretext for declining to buy fuel from Pertamina.
An energy economist at Universitas Gadjah Mada (UGM), Dr. Fahmy Radhi, stated that as a business entity, Pertamina naturally aims to secure margins from selling fuel to private stations.
However, this increases the cost of goods sold (COGS) for private SPBUs, making it harder for them to remain competitive.
“The higher the COGS, the more difficult it is for private gas stations to earn a reasonable profit margin and compete with Pertamina stations,” he said at UGM on Thursday, Oct. 23, 2025.
According to Dr. Radhi, it is inappropriate to threaten private gas stations with expulsion from Indonesia simply because they refuse to purchase Pertamina’s fuel.
Even without such warnings, several private operators such as Total and Petronas have already exited the Indonesian market.
Their main reason, he noted, was the minimal profit margin and the inability to compete against Pertamina’s widespread dominance.
If Minister Bahlil’s threat leads to a mass withdrawal of private gas stations from Indonesia, Dr. Radhi warned that it could severely damage the country’s investment climate, not only in the oil and gas sector but also across other industries.
As a solution, he proposed reverting the import period policy from six months to one year, allowing sufficient time for private operators to import fuel and preventing shortages.
“In addition, the single-gate import policy should be revoked, as it effectively creates a Pertamina monopoly over fuel procurement for gas stations, something the private sector strongly opposes,” he explained.
Author: Agung Nugroho
Post-editor: Lintang Andwyna
Photograph: CNBC Indonesia