INDONESIA
Around 25 per cent of Indonesia’s oil imports come from the Middle East and pass through the Strait of Hormuz, according to Minister of Energy and Mineral Resources Bahlil Lahadalia.
In a press conference on Apr 6, Chief Economic Affairs Minister Airlangga Hartarto said the government has increased aviation fuel surcharges by 28 percentage points to 38 per cent, up from the current 10 per cent.
It is also allowing domestic airfare price hikes to around nine to 13 per cent, while reducing import duties on spare aircraft parts to 0 per cent to lower airline operating costs.
The Indonesian government previously announced sweeping austerity measures on Mar 31 including fuel restrictions, cuts to official travel and a mandatory WFH policy.
These are aimed at saving up to 243.4 trillion rupiah (US$14.3 billion) in state expenses amid soaring energy costs, reported local news outlet Jakarta Globe.
Airlangga said at a Mar 31 press conference that the government will ration subsidised fuel through daily purchase limits starting Apr 1, such as limiting gasoline purchases for private vehicles to 50 litres a day. Previously, there was no nationwide cap on purchase limits.
Subsidised gasoline sold under state energy firm Pertamina including fuel from Pertalite Brand and diesel marketed as Biosolar will also be capped from Apr 1, Indonesia’s Downstream Oil and Gas Regulatory Agency said.
Like Malaysia, Indonesia is also an oil producer and said it would not increase fuel prices, which is heavily subsidised in Indonesia, although the country is a net energy importer.
The government has also implemented a WFH policy every Friday for public sector employees, a move which it predicts will save people a combined 59 trillion rupiah.
“The WFH rule for private sector employees still takes into account the characteristics and needs of each business,” Airlangga said in the press briefing on Mar 31.
He also announced that domestic official travel has been cut to half – with the exception of electric vehicles – with a 70 per cent cut in overseas travel.
The government has also made cuts to its free school meals programme from Mar 31, estimated to save around 40 trillion rupiah, Nanik Sudaryati Deyang, deputy head of Indonesia’s National Nutrition Agency, told AFP on Mar 29.
In a bid to strengthen energy security amid the war, Indonesia has also pushed for a transition to clean and renewable energy with more investments in oil and gas projects.
Jakarta and Tokyo on Mar 30 inked 10 memoranda of understanding and business deals worth a combined US$23.63 billion, spanning sectors including clean-energy downstream projects, oil and gas exploration and geothermal development.
“In light of the Iran situation, the strategic importance of resources and energy security is once again being recognized globally. Indonesia is a major resource-rich nation,” Japanese Prime Minister Sanae Takaichi said alongside Indonesian President Prabowo Subianto at the Indonesia-Japan Business Forum held in Tokyo.
“In the next three years, we want to (have) 100 gigawatts of solar energy. For us, this is more urgent because of the situation we are seeing now,” Prabowo added.
