Oil Prices Surge; Bahlil Accelerates Mandatory Ethanol Blending in Fuel

Jakarta — Energy and Mineral Resources Minister Bahlil Lahadalia will accelerate the implementation of mandatory bioethanol blending policy in fuel (BBM) in response to soaring global oil prices reaching $118 per barrel.

“If fossil oil prices can exceed $100 per barrel, it would be cheaper if we blend,” Bahlil said when met at the Energy Ministry office in Jakarta on Monday.

Bahlil had previously planned to mandate 20 per cent ethanol content in fuel (E20) by 2028 to reduce petrol imports. This policy could be implemented more rapidly given geopolitical dynamics in the Middle East affecting countries dependent on fossil energy.

“We are making it mandatory for petrol and it is cleaner,” Bahlil stated.

Beyond the mandatory E20 programme, Bahlil also plans to accelerate implementation of 50 per cent biodiesel (B50) blending. B50 is a fuel mixture comprising 50 per cent diesel and 50 per cent bio-based fuel derived from palm oil. Indonesia currently enforces B40 mandates, whilst B50 remains under review.

“So there are several steps we will take. Given current conditions, the government is considering the best alternatives to maintain national energy supply,” Bahlil said.

Brent crude oil has reached $118 per barrel for the first time since June 17, 2022, according to reports. This is significantly higher than January 2026 averages, when Brent was at $64 per barrel and US WTI at $57.87 per barrel.

The surge in global oil prices has been triggered by escalating conflict between the United States and Israel against Iran. Regional tensions intensified after the US and Israel launched major attacks on Iran on 28 February 2026, reported to have killed over 1,000 people, including Iran’s Supreme Leader Ali Khamenei, more than 150 schoolgirls, and numerous senior military officials.

Iran has retaliated with a series of large-scale attacks targeting US military bases, diplomatic facilities, and personnel across the region, as well as several Israeli cities. These attacks have continued to escalate.

On Sunday (8 March), the US and Israel launched air strikes targeting Iran’s oil storage facilities in Tehran and surrounding areas. The attacks caused severe damage to several storage facilities, including the Shahran Oil Depot.