The escalation of open conflict between the United States, Israel,\nand Iran in recent days is far more than a regional geopolitical issue.\nIt represents a global energy shock with the potential to directly\nstrike Indonesia\u2019s fiscal stability, electricity tariffs, and national\nindustrial competitiveness within less than a quarter.<\/p>\n
By way of illustration, approximately 17 million to 20 million\nbarrels of oil per day\u2014or nearly 20 per cent of global oil supplies\u2014pass\nthrough the Strait of Hormuz. Beyond this, approximately 30 per cent of\nglobal LNG trade also moves through the same logistics route. Any\ndisruption in this region, no matter how small, will immediately trigger\nincreases in crude oil prices, tanker insurance premiums (war risk\npremium), and global energy shipping costs.<\/p>\n
Indonesia is in an extremely vulnerable position regarding these\ndynamics. Indonesia\u2019s dependence on fuel imports (BBM) currently stands\nat between 56 and 60 per cent of total domestic needs.<\/p>\n
With this energy structure, every US$10 per barrel increase in global\ncrude oil prices has the potential to add burden to energy subsidies and\ncompensation in the state budget (APBN) to approximately Rp 35 trillion\nto Rp 40 trillion per year.<\/p>\n
If this conflict drives global oil prices to surge from the current\nrange of US$80 towards US$110 to US$130 per barrel, then the additional\npressure on the APBN could reach Rp 100 trillion to Rp 120 trillion\nsolely from the energy sector. In a tight fiscal environment, this\nfigure is not merely a statistic\u2014it is a real threat to the state\u2019s\nspending capacity, inflation stability, and public purchasing power.<\/p>\n
Risk also looms over the electricity sector. Several power plants in\nIndonesia currently have exposure to imported LNG at spot prices,\nparticularly in the western Java, Kalimantan, and Sulawesi regions. In\nconflict conditions, Asia LNG prices (JKM) could increase from the range\nof US$11 to US$12\/MMBTU to US$18 to US$22\/MMBTU.<\/p>\n
Every US$1\/MMBTU increase in LNG prices can raise the Basic Cost of\nSupply (BPP) of national electricity by approximately Rp 4 trillion to\nRp 5 trillion per year. Without policy intervention, this pressure will\nresult in:<\/p>\n
\u2022 increased need for electricity compensation,<\/p>\n
\u2022 potential increases in industrial tariffs,<\/p>\n
\u2022 weakening of the national manufacturing sector\u2019s\ncompetitiveness.<\/p>\n
In such a situation, a business-as-usual approach is no longer\nsufficient. The government must immediately activate emergency policies\nin the national energy sector.<\/p>\n
First, increase the national operational fuel reserves from an\naverage of 21 days to a minimum of 45 days of national consumption.\nSince Indonesia does not yet have an adequate Strategic Petroleum\nReserve (SPR), the government needs to open a collaboration scheme with\nthe private sector by utilising storage facilities owned by domestic\nenergy businesses as a national energy buffer.<\/p>\n
Second, maximise the use of domestic energy in the short term. In\nconditions of extreme geopolitics, coal and domestic gas must be\npositioned as energy security assets.<\/p>\n
Optimisation of coal-based power generation (baseload) and\nimplementation of the Domestic Market Obligation (DMO) for gas in the\nelectricity sector can reduce exposure to the volatile LNG spot market.\nAs an illustration, every reduction in LNG imports of 1 million tonnes\ncan save foreign exchange of up to US$400 million to US$500 million per\nyear.<\/p>\n
Third, PLN together with energy businesses must immediately secure\nlong-term LNG contracts with major supplier countries such as Qatar and\nAustralia to maintain the stability of domestic primary energy prices\namid global market volatility.<\/p>\n
Fourth, the government needs to establish an Energy Supply Shock Task\nForce involving relevant ministries and the private sector to monitor\nglobal energy logistics risks in real-time and ensure the stability of\ndomestic energy supplies to strategic industrial sectors.<\/p>\n
Global energy crisis cannot be handled by government alone. The\nprivate sector has an important role to play in:<\/p>\n
\u2022 provision of additional fuel storage facilities,<\/p>\n
\u2022 support for energy distribution logistics,<\/p>\n
\u2022 acceleration of investment in FSRU infrastructure,<\/p>\n
\u2022 and joint financing schemes for the development of national\nstrategic energy reserves.<\/p>\n
Today\u2019s global conflict is a reminder that energy resilience is not\nonly an agenda for transitioning towards clean energy, but also the\nprincipal foundation of national economic stability.<\/p>\n
Indonesia may not be able to control global conflict. However,\nIndonesia can\u2014and must\u2014strengthen its own energy resilience system\nbefore external shocks become domestic crisis.<\/p>\n
Because ultimately, energy security is economic security.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/us-iran-conflict-and-real-threat-to-indonesias-energy-stability-1772366069", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }