Reducing Oil Dependence, Economist Values EVs as an Efficient Option
Jakarta (ANTARA) – Managing Director of the Energy Shift Institute Putra Adhiguna contends that electric vehicles (EVs) represent a more economical alternative for reducing Indonesia’s dependence on crude oil compared to biodiesel and bioethanol.
“Electric vehicles are more cost-efficient in operational expenses and do not impose a significant burden on state subsidies,” Putra stated when contacted by ANTARA from Jakarta on Tuesday.
Putra conveyed that electrification represents the primary path forward and constitutes one of the reasons China actively promotes its electric vehicle industry. This is particularly significant given that China imports approximately 70 per cent of its crude oil requirements.
“Currently, Indonesia is displacing at least 3,000 barrels of oil per day through electric vehicles,” Putra said.
He emphasised that energy security is critically important; however, the government must prioritise comparing costs among available options.
If price comparisons are not conducted with clarity, Indonesia risks becoming trapped in a high-cost economy, a burden that could adversely affect Indonesian citizens and diminish Indonesia’s competitiveness in global markets.
Consequently, although biodiesel displaces at least 270,000 barrels of oil per day, Putra maintains that the electric vehicle industry requires greater promotion. He indicated that biodiesel remains dependent on escalating subsidies because its price exceeds conventional diesel.
“Supplementary biodiesel subsidies have already surged to approximately Rp35–40 trillion and will continue to rise if the government maintains support,” he said.
“It remains unclear which budget allocation the government will utilise, particularly given the constrained state budget,” Putra added.
Previously reported, Energy and Mineral Resources Minister Bahlil Lahadalia stated his intention to provide incentives for a programme converting petrol motorcycles to electric motorcycles, consistent with previous efforts by the Energy and Mineral Resources Ministry.
However, he has not yet determined the target number of motorcycles for conversion or the subsidy amount for the electric motorcycle conversion programme.
Targets and incentive amounts will be discussed at meetings of the Energy Transition Acceleration Task Force.
Bahlil stated that converting petrol motorcycles to electric motorcycles represents one of the government’s strategies for reducing pollution and transitioning from fossil fuels to renewable energy.