To boost reserves to three months, Indonesia to build oil storage tanks

Jakarta, CNBC Indonesia - The government plans to build oil storage tanks in Sumatra to increase national energy reserves to three months. The move is seen as crucial to strengthen energy security amid global geopolitical dynamics, including the conflict in the Middle East.

Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia said the current domestic oil storage capacity remains limited, capable of supporting only around 20 to 25 days of demand.

Bahlil indicated that the development of storage facilities is a priority so the government has room to hold large volumes of oil. ‘Storage must be built first. For a minimum of three months. If imports are high, where would we put them? It is as it is, not anyone’s fault,’ he said at a press conference at the ESDM Ministry, quoted on Wednesday (4/3/2026).

Meanwhile, the feasibility study for the project is currently underway and targeted for realisation this year. However, he did not provide detailed locations for the storage tanks.

‘FS is ongoing; the target is this year. The location in Sumatra—don’t ask me for the details,’ he said.

As previously known, the administration of President Prabowo Subianto had planned the construction of oil refineries and storage tanks in various areas, from Lhokseumawe in Aceh to Fakfak in West Papua.

This followed the submission of 18 pra-feasibility study documents related to downstream projects from the Downstream Task Force led by Minister ESDM Bahlil Lahadalia to the Chief Executive of the Investment Management Agency (Danantara), Rosan Roeslani.

According to briefing materials from the Ministry of ESDM, the project is included in the list of downstream and national energy resilience priorities with an investment of Rp 232 trillion. This comprises a refinery project worth Rp 160 trillion with a workforce absorption of 44,000, and an oil storage project worth Rp 72 trillion with 6,960 jobs.

The refinery and storage tank projects will be spread across 18 regions: Lhokseumawe, Sibolga, Natuna, Cilegon, Sukabumi, Semarang, Surabaya, Sampang, Pontianak, Badung (Bali), Bima, Ende, Makassar, Dongala, Bitung, Ambon, North Halmahera, Fakfak.