Bahlil: Trade Agreement with US Does Not Increase Energy Import Quota
Jakarta — Energy and Mineral Resources Minister Bahlil Lahadalia has affirmed that the trade agreement between the Indonesian Government and the United States will not increase the nation’s energy import quota.
“We are merely redirecting our imports. The total volume of imports remains the same; we are simply changing where we source them from,” Bahlil stated, according to the Ministry of Energy and Mineral Resources’ official website.
Indonesia’s annual energy requirements comprise approximately 8.3 million tonnes of liquefied petroleum gas (LPG), with domestic production reaching only 1.6 million tonnes, necessitating annual imports of 7 million tonnes. The Government also requires imported fuel (BBM) and crude oil, which were consensualised during negotiations in the United States for purchases totalling $15 billion, Bahlil explained.
Bahlil emphasised that the trade agreement merely redirects the source of imports from other nations to the United States, rather than expanding total import volumes. Indonesia’s energy requirements, particularly for LPG, BBM, and crude oil, remain dependent on imports due to insufficient domestic production capacity.
However, the agreement with the United States does not increase the total volume of imports; it simply redirects the origin of supply. The Government has assured that the purchase price of these three energy commodities will continue to follow market mechanisms. Notably, LPG prices from the United States are reported to be more competitive than those from other nations.
“The import prices for these three products valued at $15 billion from the United States align with market prices. There is no difference whether they come from the Middle East or from America. The prices are identical, and in fact, LPG from America is significantly cheaper than from other countries,” Bahlil stated.
He further emphasised that this policy will neither burden the nation nor compromise national energy sovereignty.
“We are simply redirecting our imports. The total volume remains unchanged; only the source location differs. Be assured that the nation’s sovereignty remains protected. I would never sell out my country,” he explained.
The $15 billion energy trade agreement is formalised through a Reciprocal Trade Agreement (RTA) or Agreement on Reciprocal Trade (ART), finalised during President Prabowo Subianto’s meeting with President Donald Trump in Washington DC on Thursday, 19 February. Under this agreement, Indonesia commits to increasing energy product purchases from the United States, with an indicative value of approximately $15 billion.
The breakdown includes liquefied petroleum gas imports worth approximately $3.5 billion, crude oil worth approximately $4.5 billion, and certain refined petroleum products valued at approximately $7 billion. Cooperation also encompasses other energy commodities as required domestically, including metallurgical coal and clean coal technology.
The Government has ensured that all commitments remain aligned with domestic requirements while considering competitive pricing and national interests.