Political Tensions Could Accelerate Energy Transition Implementation
A member of the National Energy Council (DEN), Satya Widya Yudha, stated that the current geopolitical situation could serve as momentum for the government to accelerate the implementation of the National Energy Policy in line with Government Regulation (GR) No 40/2025.
According to him, this energy transition scenario also aligns with recommendations from the International Energy Agency (IEA) to reduce the use of crude oil and LPG, including the IEA’s proposals for lowering demand and fiscal measures.
“This is the right time to respond to geopolitical tensions, so these actions can be accelerated,” said Satya on Thursday (26/3).
Satya emphasised that whether there is war or not, Indonesia has already planned this energy transition scenario.
“(Recommendations) from the International Energy Agency are already in place, even in the GR. Now it’s about implementation,” said Satya.
Regarding efforts to reduce demand, he cited the example of switching from fuel oil (BBM) to electricity. According to him, this policy is already incorporated in the energy transition scenario, particularly for transportation, cars, and electric stoves to reduce LPG.
“Since both LPG and BBM are imported commodities, the new policy implemented by the government is to maximise public transportation,” added Satya.
Similarly, other measures include converting motorcycles to gas fuel, particularly CNG, or to electricity.
“Although this will be done gradually. Because we also prioritise ensuring vehicle performance remains guaranteed,” he said.
This also includes the President’s policy on work-from-home (WFH), which Satya hopes can reduce mobility.
“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, the IEA’s recommendations on fiscal efforts, such as those carried out by some countries through reducing VAT on BBM, can be studied. However, all of that falls under the authority of the Ministry of Finance.
“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,” he concluded.
Previously, on 20 March 2026, the International Energy Agency (IEA) mentioned various anticipatory steps to address energy supply disruptions.
According to the IEA, efforts that can be taken include reducing demand and fiscal measures. For demand reduction, this includes minimising land and air transportation, working from home if possible. In addition, through switching to electric stoves.
As for fiscal efforts that can be implemented, this includes considerations to reduce pressure on consumers and prevent sharp fuel price increases that could drive inflation.
Regarding energy transition and reducing dependence on energy imports, the Institute for Essential Services Reform (IESR) previously stated.
For LPG, for example, IESR Executive Director Fabby Tumiwa said that Indonesia currently consumes around 8 million tonnes of LPG every year. However, domestic production capacity is still limited. Of the total needs, only about 20% is produced domestically, while the remaining 80% must be imported from various countries.
The same applies to oil. According to IESR, geopolitical tensions in the Middle East affect global oil prices, which ultimately also impact the subsidy burden.
The Acting Chairman of the National Energy Council (DEN) and Minister of Energy and Mineral Resources, Bahlil Lahadalia, emphasised that Indonesia’s energy resilience is currently in a worrying condition.