Jakarta: Indonesia plans to convert surplus diesel into aviation fuel starting in 2026 as part of efforts to reduce fuel imports, Energy Minister Bahlil Lahadalia said after a recent cabinet meeting chaired by President Prabowo Subianto, reports The Jakarta Globe.
The minister said he was confident that Indonesia would no longer need to import diesel fuel from next year, as domestic production is expected to be sufficient to meet demand. A key factor behind this plan is the government’s proposal to increase the mandatory palm oil blend in diesel from 40 percent to 50 percent in 2026.
Bahlil said the upcoming Balikpapan refinery project, being developed by state-owned oil company Pertamina at a cost of $7.4 billion, will significantly strengthen domestic fuel supply. The refinery is expected to raise processing capacity by about 100,000 barrels per day, taking the total capacity to around 360,000 barrels per day.
He said the additional capacity would result in a diesel surplus, which could be redirected for other uses. According to the minister, once diesel imports are phased out and the higher palm oil blending requirement is implemented, Indonesia could generate a surplus of around four million tonnes. This excess fuel is planned to be converted into aviation fuel.
Indonesia currently enforces a policy requiring diesel fuel to contain 40 percent palm oil-based biodiesel, known as the B40 mandate. Trials for the higher B50 blend are already underway. While the country expects to reduce diesel imports, Bahlil acknowledged that Indonesia will continue to rely on overseas supplies for gasoline in the near term. At the same time, the government is preparing to expand the use of ethanol, with plans to require all gasoline sold domestically to include a 10 percent ethanol blend from 2027.
Government data shows Indonesia’s diesel consumption is projected to reach 39.5 million kilolitres this year. Of this, about 15.6 million kilolitres comes from palm oil biodiesel, while domestic production supplies roughly 18.32 million kilolitres. The remaining gap of around 4.9 million kilolitres is met through imports.
The Energy Ministry also reported that Indonesia imported nearly 1.8 million kilolitres of jet fuel last year, a sharp increase from 278,000 kilolitres in the previous year.
