PERPRES 26 2026
Indonesia has issued a Presidential Regulation governing how the state procures petroleum, refined fuel, and liquefied petroleum gas to safeguard national energy supply. The regulation, Peraturan Presiden Nomor 26 Tahun 2026 tentang Pengadaan Minyak Bumi, Bahan Bakar Minyak, dan/atau Liquefied Petroleum Gas untuk Ketahanan Energi Nasional (Presidential Regulation 26/2026 on the Procurement of Petroleum, Fuel Oil, and/or LPG for National Energy Security), sets out who may import these commodities, on what legal basis, and how procurement is handled when supply is at risk. It responds to a recurring problem for a country that consumes far more crude and fuel than it produces: keeping imports flowing reliably while preserving accountability over the entities that arrange them.
The central issue the regulation addresses is the gap between Indonesia's domestic production and its consumption of petroleum, fuel oil, and LPG. With local output unable to meet demand, the country depends on imports that are exposed to global price swings and geopolitical disruption. The regulation frames procurement around the concept of Ketahanan Energi, defined in Pasal 1 as a condition in which energy availability and public access at affordable prices are assured over the long term while environmental protection is maintained. Translating that goal into operational rules means specifying which institutions carry out imports and under what conditions, which is the work the rest of the regulation performs.
On key provisions, the regulation channels import procurement through three legal bases set out in Pasal 2: an intergovernmental cooperation agreement, cooperation between the Central Government and an overseas supplier, or cooperation between an energy-sector business entity and an overseas supplier. Where procurement rests on the first two bases, imports may be carried out by a Public Service Agency (BLU) in the energy sector or by a state-owned enterprise (BUMN) in the energy sector. A BLU acts under a cooperation agreement, while a BUMN acts on the basis of an assignment, and a business entity imports only on the strength of an allocation and approval granted by the Central Government. Pasal 2 also permits the Minister to assign a BLU to import outside the intergovernmental framework, with such imports directed toward filling the Energy Buffer Reserve or the Operational Reserve.
Pasal 5 builds in flexibility for emergencies. It allows a BLU or BUMN to import in urgent circumstances defined by five criteria: geopolitical conditions that threaten global supply, disruption to the domestic or international supply chain, disaster or force majeure affecting supplier countries, supply shortages that drive sharp price volatility, and national reserves falling below a minimum threshold. The Minister determines when an urgent condition exists, and Pasal 5 expressly permits price differences based on quantity, product type, country of origin, and delivery timing, reflecting the reality that emergency purchases rarely command standard market terms. Financing for BLU imports may draw on the agency's internal funds or other sources under Pasal 6. For state-owned enterprises, Pasal 7 ties imports to an annual needs plan approved through ministerial allocation, while allowing direct appointment, direct purchase, and multi-year contracts when market conditions tighten. Pasal 13 closes the loop on oversight: entities must report to the Minister monthly, no later than the fifteenth of the following month, and complaints of misconduct are resolved through administrative sanctions, with criminal referrals to the police, prosecutors, or the anti-corruption commission still prioritizing the administrative process first.
The implications fall on the institutions named in the text and on the market they operate in. By giving BLUs an explicit role alongside BUMNs, the regulation widens the set of bodies that can act as state importers, which may matter for how buffer and operational reserves are stocked. The emergency provisions in Pasal 5 and the multi-year contracting allowance in Pasal 7 give importers room to act quickly and to lock in supply during volatile periods, but they also concentrate discretion in the Minister, who both declares emergencies and approves annual allocations. The monthly reporting duty under Pasal 13 is the main counterweight, creating a paper trail that regulators and enforcement bodies can examine after the fact.
The regulation also fixes the vocabulary that governs how its actors are classified. Pasal 1 defines a BUMN as a business entity in which the state holds all or most of the capital through direct participation, or in which the state holds a special right, and it separates the Public Service Agency, which Pasal 1 describes as a government body that supplies goods or services without prioritizing profit and operates on principles of efficiency and productivity. These definitions matter because the import roles assigned in Pasal 2 and Pasal 7 turn on them: a BLU acts under a cooperation agreement or ministerial assignment, while a BUMN acts on an assignment tied to an annual needs plan. The same article defines the Minister as the official responsible for oil and gas affairs, locating the discretionary powers used throughout the regulation in a single portfolio. Read together with the reserve targets in Pasal 2 and the reporting duty in Pasal 13, these provisions form a procurement framework that names its actors, fixes their legal bases for importing, and channels their activity through periodic reporting to the responsible Minister.
Methodology: This memo summarises the official regulation text and is not legal advice; report corrections to contact@crpg.info.
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