Coal to Petrol Conversion: Experts Suggest Strategy to Prabowo
The Indonesian Mining Experts Association (Perhapi) has provided advice to President Prabumn Subianto’s administration to involve the Danantara Investment Management Agency in plans to develop petrol derived from coal.
Perhapi Chairman Sudirman Widhy stated that Danantara’s involvement could serve as an option to support the financing of the project, given its significant investment requirements. “If the government is serious about initiating the plan to convert coal into petrol, Danantara may be the entity to rely on for financing the investment,” Widhy told CNBC Indonesia on Wednesday (23/09/2026).
He suggested that Danantara could collaborate with State-Owned Enterprises (SOEs) in the coal and oil and gas sectors. This could include partnerships with PT Bukit Asam Tbk (PTBA) as a coal producer and PT Pertamina (Persero) as the national oil company. “Danantara can work with coal-producing SOEs like PTBA as well as oil management SOEs (Pertamina) to begin working on this coal-to-petrol conversion project,” he added.
Furthermore, he explained that technologically, processing coal into petrol or gasoline is already possible. South Africa is one of the nations that has developed this technology through the company Sasol, using Coal to Liquid (CTL) facilities.
However, the main challenge in developing this project is not the technology, but the economics. Sudirman noted that the coal-to-petrol project requires substantial capital expenditure (capex) and operational costs. “This process will require significant capital expenditure and operational costs, which may mean that few private parties are currently willing to invest or commit capital to the production of petrol from coal,” he said.
Previously, Prabowo stated that developing fuel from domestic resources is the result of research and innovation by Indonesian academics, particularly from engineering faculties. “Our professors, who are truly brilliant… from our engineering faculties, we have successfully produced diesel from palm oil, and we have been able to produce petrol from palm oil, and we will also produce petrol from coal,” Prabowo said while attending the 100th Anniversary Celebration of Pondok Modern Darussalam Gontor in East Java, as quoted on Sunday (20/09/2026).
According to Prabowo, the success of the B50 programme serves as evidence that Indonesia is capable of utilising domestic natural resources to meet national energy needs. “Since 1st July, we have not imported diesel from abroad. Our diesel is now self-sufficient,” he stated.
Prabowo emphasised that diesel self-sufficiency is a crucial step amidst global uncertainties, which continue to be shadowed by geopolitical conflicts and energy supply chain disruptions.