Energy Minister Proposes Over US$10 Billion in Oil and LPG Imports from US to Balance Trade
Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia has proposed increasing Indonesia's oil and LPG import quota from the United States to a value exceeding US$10 billion (approximately Rp167.73 trillion). The proposal aims to rebalance the trade deficit between Indonesia and the United States.
"We at ESDM are proposing that we import some oil from America by increasing the LPG import quota to roughly above US$10 billion," Bahlil said after the opening of the Global Hydrogen Ecosystem Summit and Exhibition 2025 in Jakarta on Tuesday, 15 April 2025.
Bahlil believes that increasing oil and LPG imports from the US could help rebalance bilateral trade. He explained that one of the factors driving the US to impose a 32 per cent reciprocal tariff on Indonesia was the imbalance in bilateral trade.
The move is considered strategic given the longstanding trade imbalance. By increasing the volume of oil and LPG imports from the US, trade relations between the two countries are expected to become more balanced and mutually beneficial.
"BPS data shows our surplus is US$14.6 billion. America wants our trade balance to be even. If it is balanced, then under the direction of President Prabowo, we have been asked to check what other commodities we can purchase from America," Bahlil said.
The United States imposed a 32 per cent reciprocal tariff on Indonesia, though several exemptions apply. Products not subject to the reciprocal tariff include those protected under 50 USC 1702(b), such as medical products and humanitarian aid. Items already subject to Section 232 tariffs — including steel, aluminium, vehicles and automobile parts — are also exempt. Strategic products such as copper, semiconductors, forestry products, pharmaceuticals, bullion, and certain energy and mineral resources unavailable in the US domestic market are likewise excluded.
The tariff was originally scheduled to take effect on 9 April 2025. However, US President Donald Trump subsequently announced a 90-day postponement of reciprocal tariffs for more than 75 countries, though a minimum tariff of 10 per cent would still apply. Trump chose instead to raise tariffs on China to 125 per cent.
Bahlil emphasised that the government has no plans to lobby the United States regarding critical minerals. He said the primary issue at present is the trade imbalance, not other matters. However, should the US wish to cooperate on critical minerals, the Indonesian government is open to discussion.
"Critical minerals have nothing to do with this tariff war. If there is bilateral communication and they need our critical minerals, we are open. We are very open and happy," the Energy Minister added.
Bahlil said that if the increased oil and LPG imports from the US are realised, the trade deficit between Indonesia and the US can be addressed. He is confident the policy will balance bilateral trade, which is precisely what the government is working towards.
"If we shift just this alone, the trade deficit with America will no longer occur. Our balance will be even — this is what we intend to do," he said.
"We at ESDM are proposing that we import some oil from America by increasing the LPG import quota to roughly above US$10 billion," Bahlil said after the opening of the Global Hydrogen Ecosystem Summit and Exhibition 2025 in Jakarta on Tuesday, 15 April 2025.
Bahlil believes that increasing oil and LPG imports from the US could help rebalance bilateral trade. He explained that one of the factors driving the US to impose a 32 per cent reciprocal tariff on Indonesia was the imbalance in bilateral trade.
The move is considered strategic given the longstanding trade imbalance. By increasing the volume of oil and LPG imports from the US, trade relations between the two countries are expected to become more balanced and mutually beneficial.
"BPS data shows our surplus is US$14.6 billion. America wants our trade balance to be even. If it is balanced, then under the direction of President Prabowo, we have been asked to check what other commodities we can purchase from America," Bahlil said.
The United States imposed a 32 per cent reciprocal tariff on Indonesia, though several exemptions apply. Products not subject to the reciprocal tariff include those protected under 50 USC 1702(b), such as medical products and humanitarian aid. Items already subject to Section 232 tariffs — including steel, aluminium, vehicles and automobile parts — are also exempt. Strategic products such as copper, semiconductors, forestry products, pharmaceuticals, bullion, and certain energy and mineral resources unavailable in the US domestic market are likewise excluded.
The tariff was originally scheduled to take effect on 9 April 2025. However, US President Donald Trump subsequently announced a 90-day postponement of reciprocal tariffs for more than 75 countries, though a minimum tariff of 10 per cent would still apply. Trump chose instead to raise tariffs on China to 125 per cent.
Bahlil emphasised that the government has no plans to lobby the United States regarding critical minerals. He said the primary issue at present is the trade imbalance, not other matters. However, should the US wish to cooperate on critical minerals, the Indonesian government is open to discussion.
"Critical minerals have nothing to do with this tariff war. If there is bilateral communication and they need our critical minerals, we are open. We are very open and happy," the Energy Minister added.
Bahlil said that if the increased oil and LPG imports from the US are realised, the trade deficit between Indonesia and the US can be addressed. He is confident the policy will balance bilateral trade, which is precisely what the government is working towards.
"If we shift just this alone, the trade deficit with America will no longer occur. Our balance will be even — this is what we intend to do," he said.