Bahlil Reports to President on New Mining Governance Design
Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia reported a new design for mineral and coal mining governance to President Prabowo Subianto at the State Palace on Tuesday (5/5/2026). The government is preparing a new formulation to strengthen the state’s revenue share while reorganising mining permits.
The meeting also discussed developments in Indonesia’s crude oil price (Indonesian Crude Price/ICP) and steps to bolster national energy resilience. The mining reorganisation is directed to align more closely with constitutional mandates and provide more optimal fiscal contributions.
“I was called by the President to discuss several developments, including the crude oil price against ICP. Then also the future mining reorganisation where ownership must be dominated by the state. This relates to the implementation of Article 33,” said Bahlil at the State Palace, Jakarta, quoted on Wednesday (6/5/2026).
The mining reorganisation will target both old and new permits. The government is preparing a new approach to make revenue sharing more optimal for the state, while still opening opportunities for cooperation with business actors.
The prepared scheme refers to the model already implemented in the oil and gas sector. The government assesses that mechanisms such as cost recovery and gross split can be adapted to the mineral and coal sector with several adjustments.
“For mining, both old and new, we will optimise state revenues. We are using examples from the oil and gas management scheme, such as cost recovery and gross split,” said Bahlil.
Through this approach, the government will maintain the concession scheme, but with emphasis on a new balance in benefit sharing. The state is directed to obtain a larger share compared to previous patterns.
“Still concessions, but we will optimise it so that state revenues are larger and more balanced,” said Bahlil.
Government Reviews CNG
Outside the mining sector, the government is also reviewing energy substitution to reduce imports. The use of liquefied petroleum gas (LPG) is starting to shift to compressed natural gas (CNG) based on domestic resources.
CNG prices are estimated to be about 30 percent cheaper than LPG. This advantage is supported by the availability of gas domestically as well as more efficient distribution costs.
“Because the gas is available domestically and the industry is also domestic, we don’t need to import. Transportation costs can also be reduced,” said Bahlil.
This conversion programme is projected to save foreign exchange up to Rp 130 trillion and reduce the energy subsidy burden. Trials of CNG cylinder use are ongoing, considering the gas pressure reaches 250 bar and requires adjustments from the 3-kilogram LPG cylinder.
Trial results are targeted to be available in the next two to three months. The government is preparing follow-up steps to ensure safe and efficient implementation.