Role of State-Owned Energy Enterprises Needs Strengthening Amid Global Crisis
JAKARTA – Muhammad Kholid Syeirazi, a member of the National Energy Council (DEN), assesses that the global geopolitical dynamics in the Middle East have exerted significant pressure on the national energy system. The conflict, which is now beginning to subside, has caused a surge in world oil prices to around USD 110 per barrel, an increase of about 60 per cent from the start-of-year position.
“This situation demonstrates that threats to our energy resilience do not entirely originate domestically, but are strongly influenced by uncontrollable global factors, such as geopolitical conflicts and supply chain disruptions,” Kholid stated during the Discussion Forum “Maintaining Energy Resilience Amid Global Oil Price Volatility” organised by the Energy & Mining Editor Society (E2S) in Jakarta on Thursday (9/4/2026).
In addition to the price surge, Kholid said the disruptions in the Strait of Hormuz, which serves as a route for about 20 per cent of the world’s oil supply, have impacted Indonesia. He noted that nearly one-third of LPG imports and about one-fifth of crude oil imports pass through that route.
As a mitigation step, the government has begun promoting diversification of energy import sources by expanding supplies from countries outside the conflict-ridden Middle East region. Kholid deems this effort important for reducing supply disruption risks due to geopolitical tensions and ensuring the sustainability of national energy distribution.
“Of course, we are pushing for a legal framework for that, so that when Pertamina buys crude oil from Australia, for example, it does not become a problem later on,” he said.
On the other hand, Kholid sees domestic conditions revealing structural vulnerabilities. National oil production in 2025 was recorded at around 220.9 million barrels, while imports reached 117.8 million barrels. Reliance on LPG imports is even higher, with import volumes reaching 7.47 million tonnes.
Kholid calculates that every USD 1 per barrel increase in oil prices could potentially raise the state budget burden by up to Rp10.3 trillion, particularly for energy subsidies and compensation. If oil prices rise by USD 10 per barrel, the additional subsidy burden could reach Rp79 trillion.
Nevertheless, indicators of national energy resilience are still assessed by Kholid as showing a positive trend. Indonesia’s Energy Resilience Index (IKE) in 2025 was recorded at 7.13, falling into the ‘resilient’ category. However, to maintain and improve this achievement, adaptive strategic steps are needed in response to external pressures.
In this context, Kholid opines that energy state-owned enterprises play a crucial role as the frontline in responding to crises. From ensuring supply availability, maintaining distribution stability, to acting as a price buffer amid global volatility.
For this reason, there needs to be a strengthening of the role of energy SOEs to safeguard the stability of domestic energy supply and prices.
“We cannot control world oil prices or global conflicts, but we can strengthen our domestic foundations. This is where the role of energy SOEs becomes highly strategic in cushioning the impact of crises,” Kholid stated.