A Public Service Agency (BLU) will be assigned to import oil and gas. Fiscal risk mitigation and transparency are needed.
The government has authorized public service agencies (BLUs) in the energy sector to carry out oil and gas imports. This policy is stipulated in Presidential Regulation No. 26 of 2026 on the Procurement of Crude Oil, Fuel Oil, and/or Liquefied Petroleum Gas for National Energy Security. In addition to BLUs, state-owned energy enterprises (SOEs) and private companies are also permitted to conduct oil and gas imports.
Article 5 paragraph (1) of Presidential Regulation 26/2026 states that, under emergency circumstances related to domestic supply needs, BLUs or state-owned energy enterprises may carry out imports based on several criteria. First, geopolitical conditions that may disrupt the global availability of crude oil, fuel oil, and/or LPG. Second, disruptions to oil, fuel, and/or LPG supply chains both domestically and internationally.
The third criterion is disasters or force majeure conditions affecting supplier countries. Another criterion is limited supply, resulting in significant price fluctuations, or situations in which national minimum reserves of crude oil, fuel oil, and/or LPG fall below the established threshold. The Minister of Energy is responsible for determining whether an emergency situation exists based on these criteria.
“For import procurement conducted under emergency circumstances as referred to in paragraph (1), price differences based on quantity, product type, country of origin, and delivery schedule are permissible in accordance with the purchase contract agreement,” Article 5 paragraph (3) states.
The regulation also provides that BLUs may import oil under intergovernmental cooperation agreements or agreements between the central government and overseas suppliers. Unlike SOEs, which import based on government assignments, BLUs may conduct imports pursuant to cooperation agreements.
In addition, the minister may assign a BLU to procure imports outside the framework of intergovernmental agreements or agreements between the central government and foreign suppliers. “Financing for imports carried out by a BLU may originate from the BLU’s internal funds and/or other funding sources in accordance with prevailing laws and regulations,” Article 6 states.
In implementing the policy, Deputy Minister of Energy and Mineral Resources Yuliot Tanjung said the government would optimize existing energy-sector BLUs. These include the Oil and Gas Testing Center (Lemigas), a BLU under the Ministry of Energy and Mineral Resources. “So the procurement will be carried out by Lemigas,” Yuliot said on Friday, May 29, 2026, as quoted by Antara.
Presidential Regulation 26/2026 and the authorization for BLU-led imports were issued alongside the government’s plan to import 150 million barrels of crude oil from Russia. A special regulatory arrangement was considered necessary because PT Pertamina (Persero), the state-owned energy company, is bound by global bond commitments. Therefore, allowing BLUs to conduct imports is intended to mitigate sanctions risks and potential violations of international debt covenants.
Muhammad Ishak Razak, a researcher at the Center of Reform on Economics (CORE), views the involvement of public service agencies in oil and gas imports as a pragmatic policy to mitigate potential risks associated with imports from Russia. According to him, Indonesia needs to diversify its energy supply amid global geopolitical instability.
“BLUs are considered more legally flexible in executing purchases of oil and LPG from sources that Pertamina cannot directly access,” Ishak said on Sunday, May 31, 2026.
On the positive side, Ishak argued that BLU-led imports could provide access to cheaper alternative oil sources. On the downside, however, because BLUs rely on state budget financing, the scheme could create fiscal risks. The government would bear the burden if global oil prices exceeded the assumptions used in the state budget.
Therefore, Ishak emphasized that the government must implement concrete measures to mitigate risks of budget inefficiency and external shocks. These include strengthening audits by the Supreme Audit Agency (BPK) over import contracts and establishing independent oversight involving parliament and civil society organizations.
“The government should also impose measurable import volume limits and conduct international legal consultations before transactions with Russia are executed,” he said.
Separately, Aryanto Nugroho, National Coordinator of Publish What You Pay (PWYP) Indonesia, said that speed and flexibility in energy procurement are necessary amid supply disruptions caused by geopolitical tensions. He acknowledged that allowing BLUs to conduct imports could help respond to urgent needs. Diversifying procurement channels could also reduce dependence on a single import intermediary.
However, Aryanto argued that involving public service agencies in import procurement risks creating new rent-seeking opportunities. He also highlighted a mismatch in institutional design. BLUs are public service entities, not profit-seeking corporations, yet they are being tasked with executing massive commercial transactions.
“Lemigas, for example, is a research and testing institution, not an oil trading house,” Aryanto said. “There will be a significant capacity gap and potential overlap of authority with Pertamina, which could blur lines of accountability.”
According to Aryanto, the greatest risk of BLU-led imports lies in direct appointments or procurement without competitive tendering under the pretext of emergency conditions. He pointed to several past legal cases, including the corruption case involving condensate sales between BP Migas and PT Trans-Pacific Petrochemical Indotama (TPPI). Due to TPPI’s direct appointment, the scandal caused state losses estimated at US$2.7 billion.
Aryanto stressed that open tendering should remain the primary procurement mechanism. Therefore, any policy allowing BLU imports must be accompanied by transparency in contracts. He also urged the government to clearly define what constitutes an “emergency” as the basis for import procurement.
“There must be a time limit so that emergency exceptions do not become the norm,” he said.
Regarding concerns over new rent-seeking opportunities and oversight of imports conducted by public service agencies, Tempo sought comments from Deputy Minister of Energy and Mineral Resources Yuliot Tanjung and Director General of Oil and Gas Laode Sulaeman via WhatsApp on Sunday, May 31, 2026. However, no response had been received by the time this report was published.
Source: Tempo