The increase in population and the growth of the economy have increased the demand for fuel oil (BBM). However, this increase has not been matched by domestic production. This increasing dependence on fossil energy sources, in addition to risking national energy security, will also burden government finances.
Data from the Ministry of Energy and Mineral Resources shows that energy consumption from fuel oil still holds a significant proportion in the national energy mix. With the increasing population, national fuel consumption also continues to soar. It is recorded that energy consumption increased from 396.21 million barrels in 2014 to 507.76 million barrels in 2024. Within a decade, fuel consumption increased by about 28%.
Unfortunately, this trend of increasing consumption is inversely proportional to the condition of domestic oil production. Data shows an alarming decline in production. Oil production continues to fall from 287.902 million barrels in 2014 to only 212.332 million barrels in 2024.
This widening gap between soaring consumption and slumping production has automatically led to an increased need for imports to cover the supply deficit. Oil imports, both oil products and crude oil, become a safety valve to ensure the availability of daily energy for the people.
This increase in imports, unfortunately, puts a heavy burden on the foreign trade balance of the oil and gas sector. The deficit condition (imports greater than exports) in this sector is getting bigger. Particularly in oil product imports, the figure jumped significantly from 18,688.9 thousand tons in 2006 to 36,888.7 thousand tons in 2024. It was observed that until 2024 the trade balance of oil products scored a deficit of 28,796.8 thousand tons, while the trade in crude oil reached a deficit of 18,236 thousand tons.
Meanwhile, crude oil imports are also on an upward trend, reaching 16,895.2 by 2024. This growing import demand has made the oil and gas sector a major contributor in enlarging the trade balance deficit and putting pressure on the country's fiscal stability due to the high allocation of energy subsidies and compensation.
Long-term energy demand is expected to continue to increase, resulting in Indonesia falling into a deficit trap that threatens energy independence. Immediate and bold policies need to be taken to reduce the high dependence on oil imports.
For short- and medium-term solutions, efforts to maximize the capacity of oil refineries or even add refineries by Pertamina are a necessity. Increased efficiency and refinery capacity will help increase the production of oil products in the country.
However, this effort needs to be accompanied by investment in upstream exploration and production to stem the rate of decline in national crude oil production.
In addition to optimizing domestic oil production, the plan to reduce the fossil energy mix, especially in the use of fuel, must be accelerated to achieve energy independence. The government's biomass mandate since 2014 encourages the use of biofuels to cover fuel consumption needs.
