ASIATODAY.ID, JAKARTA – Indonesia has temporarily halted portions of its coal exports to prioritize domestic electricity supply, marking one of the government’s strongest interventions in the energy market as geopolitical uncertainty continues to reshape global energy security.
Minister of Energy and Mineral Resources Bahlil Lahadalia said the decision was taken under the direction of President Prabowo Subianto after concerns emerged over the adequacy of coal supplies for state electricity company PT PLN (Persero). The government is determined to prevent any recurrence of large-scale power disruptions by ensuring domestic demand takes precedence over exports.
According to Bahlil, PLN requires around 154 million metric tons (MT) of coal this year, yet only 141 million MT has been secured, leaving a shortfall of approximately 13 million MT.
The minister questioned why supplies remained insufficient despite Indonesia’s Domestic Market Obligation (DMO), under which coal producers had committed to allocating between 160 million and 170 million MT for domestic needs through their approved Work Plans and Budget (RKAB).
The discrepancy has prompted the government to temporarily retain coal shipments originally intended for export until national electricity requirements are fully met.
“Following the President’s directive, we do not want this situation to happen again. Domestic needs must come first,” Bahlil said during the CNBC Indonesia Energy Forum in Jakarta on Thursday.
To strengthen oversight, the government will establish a dedicated primary energy procurement team involving the Inspectorate General of the Ministry of Energy and Mineral Resources, PLN, and law enforcement agencies. The initiative aims to improve transparency and eliminate recurring supply problems that have surfaced in recent years.
Energy Security Becomes National Priority
The coal export restriction forms part of a broader government strategy to strengthen Indonesia’s energy resilience amid escalating geopolitical tensions, volatile commodity markets, and disruptions to global supply chains.
Bahlil likened today’s geopolitical landscape to “malaria,” describing it as highly unpredictable, with conditions capable of changing dramatically from one day to the next.
As a result, Indonesia is accelerating efforts to reduce dependence on imported energy, including LPG, refined fuels, and crude oil, while maximizing domestic resources.
Among the government’s flagship initiatives is the expansion of Compressed Natural Gas (CNG) as an alternative to subsidized 3-kilogram LPG cylinders. Currently in its third pilot phase, the program is expected to reduce LPG imports while offering fuel costs estimated to be 30–40% lower than conventional LPG.
At the same time, the government plans to officially launch B50 biodiesel in July 2026, a move expected to significantly curb diesel imports and increase the use of domestically produced palm oil.
Bahlil said the B50 program would become a cornerstone of Indonesia’s ambition to eventually eliminate diesel imports, strengthen national energy security, and improve the country’s trade balance through greater downstream value creation.
Diversifying Energy Sources
Despite prioritizing domestic production, Indonesia is also exploring alternative international supply options. The Ministry of Energy and Mineral Resources is currently studying the feasibility of importing crude oil from Russia to diversify supply sources should geopolitical disruptions intensify.
Meanwhile, the government is accelerating several delayed strategic upstream projects, including the long-awaited Masela Block development, which is expected to play a key role in boosting domestic natural gas production over the coming years.
Taken together, the temporary coal export restrictions, expansion of domestic fuel alternatives, rollout of B50 biodiesel, and acceleration of strategic energy projects signal a broader policy shift as Southeast Asia’s largest economy moves to prioritize energy security over export volumes in an increasingly uncertain global environment. (AT Network)
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