DEN Member: IEA Recommendations Align with Indonesia's Energy Transition Scenario

Jakarta (ANTARA) - Satya Widya Yudha, a member of the National Energy Council (DEN), assesses that the International Energy Agency’s (IEA) recommendations to reduce crude oil and LPG usage align with Indonesia’s energy transition scenario.

Furthermore, he notes that the government has issued Government Regulation (PP) No. 40 of 2025 on the National Energy Policy.

“(The recommendations) from the International Energy Agency are already in place, even in the PP; now it’s about implementation,” he said in Jakarta on Thursday.

According to him, whether there is war or not, Indonesia has already planned this energy transition scenario, and the current situation could serve as momentum to accelerate actions.

“It’s just that now, in response to this geopolitical tension, these actions can be sped up,” he stated.

Satya added that the IEA recommendations, including reducing demand and usage through fiscal measures, align with the national energy transition scenario.

Regarding efforts to lower demand, he cited examples such as shifting from fuel oil (BBM) to electricity; this policy is already incorporated into the energy transition scenario, particularly for vehicles, transportation, and electric stoves to reduce LPG.

“Because LPG and BBM are both imported commodities, the new policy implemented by the government is to maximise public transportation,” he said in his statement.

Similarly for others, such as converting motorcycles to compressed natural gas (CNG) or electricity, albeit gradually.

This includes the President’s policy on working from home (WFH), which is expected to reduce mobility, he added.

“So in essence, in the National Energy Policy, not only supply is regulated, but demand as well. Because we want to exit the middle-income trap by 2045, which means we also expect high economic growth,” he explained.

On the other hand, regarding the IEA’s fiscal recommendations, such as those undertaken by some countries through reducing VAT on BBM, Satya believes they can be studied. However, all of that certainly falls under the authority of the Ministry of Finance.

According to Satya, what needs to be emphasised instead is education for the public. In this regard, the public should be more prudent and frugal in consuming BBM and LPG.

Previously, on 20 March 2026, the International Energy Agency (IEA) outlined various anticipatory measures to address energy supply disruptions.

According to the IEA, efforts that can be taken include reducing demand and fiscal measures. For demand reduction steps, these include minimising land and air transportation and working from home where possible. Additionally, shifting to electric stoves.

“Addressing demand is an important and immediate tool to reduce pressure on consumers by improving affordability and supporting energy security,” the IEA stated.

As for fiscal efforts that can be undertaken, these include considerations to reduce pressure on consumers and prevent sharp fuel price increases that could drive inflation.

Previously, regarding the importance of energy transition and reducing reliance on energy imports, Executive Director of the Institute for Essential Services Reform (IESR) Fabby Tumiwa stated that for LPG, for example, Indonesia currently consumes around 8 million tonnes of LPG annually.

However, domestic production capacity is still limited; from the total needs, only about 20 percent is produced domestically, while the remaining 80 percent must be imported from various countries.

“This high dependence on imports makes Indonesia quite vulnerable to changes in global geopolitical conditions,” he said.

The same applies to oil; according to him, geopolitical tensions in the Middle East affect global oil prices, which ultimately also impact subsidy burdens.

With a fiscal sensitivity of around Rp6.7 trillion for every US$1 increase in oil prices, if oil prices stabilise temporarily at around US$80 per barrel (a US$10 increase from the macroeconomic assumptions in the state budget), there is an estimated additional subsidy burden of up to Rp67 trillion.