Minister of Finance, Purbaya Yudhi Sadewa, has voiced concern over the country’s ballooning energy subsidies, placing part of the blame on state-owned energy giant Pertamina for failing to build new oil refineries.
Speaking at a hearing with Commission XI of the House of Representatives (DPR) on Tuesday, September 30, 2025 Purbaya accused Pertamina of being complacent in addressing Indonesia’s growing energy needs.
“Building refineries is not something we cannot do, or that we cannot manage. It’s just that Pertamina is being lazy,” he said.
Recalling his time at the Coordinating Ministry for Maritime Affairs between 2018 and 2020, Purbaya said he had once proposed a partnership with a Chinese investor to construct a refinery. The deal, he explained, would have given Pertamina full ownership of the facility after 30 years.
“But Pertamina objected, saying they were already over capacity,” he recounted. “They even claimed they wanted to build seven new refineries, yet not a single one has materialized to this day.”
Purbaya urged lawmakers to step up oversight of Pertamina’s performance, warning that the failure to expand refining capacity has forced Indonesia to rely on costly imports, particularly from Singapore.
“Please help control them too. I will monitor them, but I need you to do the same, because we are losing a lot,” he told parliamentarians.
According to the Finance Ministry data, energy subsidy spending reached Rp218 trillion (US$13.6 billion) as of August 31, 2025, covering fuel and 3-kilogram LPG cylinders. The surge was driven by rising Indonesian crude prices, the depreciation of the rupiah, and growing consumption of subsidized goods.
Fuel subsidies rose 3.5 percent, 3-kg LPG subsidies 3.6 percent, electricity subsidies 3.8 percent, and fertilizer subsidies surged 12.1 percent, marking the steepest increase.
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