Indonesia Must Prepare to Spend Tens of Trillions to Build New Oil Storage Tanks
Indonesia will build new oil storage facilities to increase its domestic crude oil storage capacity, which currently can sustain supply for only 20-25 days.
Storage facilities can function as Strategic Energy Reserves (CPE) or Strategic Petroleum Reserves (SPR). However, Komaidi Notonegoro, Executive Director of ReforMiner Institute, has revealed that Indonesia requires tens of trillions of rupiah in budget allocations to build strategic energy reserves comparable to those of developed nations.
Komaidi stated that countries worldwide generally maintain strategic energy reserves averaging three to six months as a precautionary measure against energy crises or disruptions in global oil distribution.
“In more developed countries, they have even larger stockpiles, but this is linked to many factors, so storage capacity must be large, and fiscal allocation for maintaining reserves must also be substantial,” Komaidi told CNBC Indonesia on Monday 9 March 2026.
According to him, building such energy reserves requires significant budgetary outlays. To provide fuel stocks for just one day requires approximately Rp2.5 trillion to Rp3 trillion in budget allocation. This means that if Indonesia wants to maintain energy reserves for 30 days, funding needs could reach approximately Rp60 trillion to Rp90 trillion.
“Currently we have 20-25 days, but even that stock is not government-owned; it is operational stock held by business entities as unsold inventory. This is burdensome for business entities if they must keep their money tied up for an extended period,” said Komaidi.
Previously, Energy and Mineral Resources Minister Bahlil Lahadalia explained why Indonesia’s fuel stock reaches only 20 days. This statement sparked public concern following the closure of the Strait of Hormuz by Iran.
Concern emerged because of the closure of a major global oil trade route. Pertamina also disclosed that 19% of Indonesia’s oil imports originate from the Middle East via the Strait of Hormuz.
However, according to Bahlil, the 20-day stock represents the maximum storage capacity for fuel domestically. “Do not misunderstand; our storage capacity in Indonesia has long not exceeded 21-25 days. So the national minimum standard is 20-21 days, maximum 25 days,” he said at the Presidential Palace complex on Wednesday 4 March 2026.
Bahlil also explained that based on Pertamina reports, Indonesia’s current fuel stock has reached 22-23 days.
“Why don’t we maintain reserves beyond 25 days? Where would we store them? Storage capacity is insufficient. So please be clear: it is not that we cannot prepare more than 25 days, but rather that storage capacity simply does not exist,” said Bahlil.
Furthermore, Bahlil explained that President Prabowo Subianto has ordered the construction of fuel storage refineries to extend Indonesia’s energy resilience. The target storage capacity is expected to reach fuel stocks for three months.