The Indonesian government is planning to reduce oil imports through electrification.
Headlined by The Jakarta Post, a photo shows Indonesian President Prabowo Subianto (left) meeting with Japan's Emperor Naruhito at the Tokyo Imperial Palace.
The newspaper highlights that Indonesia’s push toward electrification requires stronger political will and a “long-term strategy”.
Experts in Jakarta say that President Prabowo Subianto’s drive to electrify transportation and household use to reduce dependence on fuel imports necessitates sustained policy support and coordinated implementation across ministries.
While electrification cannot alleviate current oil supply shocks, the ongoing Middle East crisis has indeed underscored Indonesia’s exposure in the global energy market and reinforced the necessity of replacing fossil-fueled vehicles and appliances with electric alternatives.
“If Indonesia doesn’t want to keep reliving oil crises, electric vehicles are the right strategy,” Putra Adiguna, editor-in-chief of the Energy Transition Institute (ESI), told The Jakarta Post on Friday. He said that incentive measures remain crucial during the early stages of electrification to promote market adoption and scale up production, but must be “carefully evaluated” based on past project experiences. “Subsidies are important for kickstarting the initial market; then the government must ensure charging infrastructure is ready, while automakers compete on price and increase domestic production.”
The government began promoting electrification in 2019, aiming at leveraging Indonesia’s abundant nickel reserves to position the country as a global center for electric vehicles, attracting investment and accelerating domestic adoption through a series of tax incentives.
However, subsidies for purchasing new electric motorcycles ended at the end of 2024, and incentives for electric cars are set to expire by the end of 2025, with no clear indication these measures will be renewed.
Earlier this month, as escalating Middle East conflict drove global oil prices above $100 per barrel, the president once again pushed for electrification—now facing a situation far exceeding the country’s 2026 budget assumption of $70 per barrel. As a net oil importer, nearly half of Indonesia’s domestic consumption is met through foreign imports, making it highly vulnerable to global oil price fluctuations.
According to estimates by the Energy Economics and Financial Analysis Institute (ESI), every $1 rise in annual oil prices increases the nation’s fuel subsidy bill by approximately 7 trillion Indonesian rupiah (US$414 million).
Prabowo has long advocated biofuels as a path to energy security, and now he is calling for a full transition to electric vehicles and electric stoves, while setting a goal to add up to 100 gigawatts of solar power capacity within four years and retrofitting 120 million motorcycles.
Putra noted that currently, electric vehicles only reduce oil consumption by about 3,000 barrels per day—just a small fraction of national demand. He cautioned against judging electrification using short-term metrics, emphasizing the need for stronger political commitment to ensure fuel subsidies don’t surge during future crises. “(Electrification policy) isn’t something to be assessed annually. It’s part of a long-term strategy, with progress made in stages.”
Putra urged policymakers to transparently evaluate energy trade-offs, pointing out that the country spends between 30 trillion and 50 trillion rupiah annually on biofuel subsidies, a figure that could rise further as the government considers expanding biodiesel authorization. On March 19, Minister of Higher Education, Science, and Technology Brian Yuliatto stated at the Presidential Palace that universities have been tasked with finding ways to reduce fuel usage—including cutting back on diesel, gasoline, and liquefied petroleum gas (LPG) used for cooking—to address the energy crisis.
Original article: toutiao.com/article/1861224126017548/
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