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Jakarta Post

Jokowi yet to reform upstream energy: Expert

  • Ayomi Amindoni
    Ayomi Amindoni

    The Jakarta Post

Jakarta   /   Tue, October 18, 2016   /  05:51 pm
Jokowi yet to reform upstream energy: Expert Pertamina Hulu Energi (PHE) technicians work on the installation of the company's offshore rig stationed in the Madura Strait, East Java on Oct. 12. (Antara/Zabur Karuru)

After setting up the foundation for energy reform for the downstream industry in his first year in office, President Joko "Jokowi" Widodo has left the upstream industry without significant improvement, an expert says.

Executive director Komaidi Notonegoro of Jakarta-based energy research organization ReforMiner Insititute said Jokowi made a strong move by cutting the fuel subsidy only a month after his inauguration. He also liquidated Pertamina Energi Trading Ltd (Petral) and its subsidiaries after alleged corruption scandals in Pertamina, Indonesia’s state-owned energy company.

While many parties applauded the two policies, the policies only improved the energy sector's downstream industry but did not address the root of the problem in the upstream industry, he said.

"There are two possibilities why reform has been focused on the downstream industry. First, the minister at that time [Sudirman Said] might not have understood the upstream industry. Second, perhaps he did understand but preferred to start with the downstream industry as it more closely related to people's daily lives," Komaidi said.

Komaidi thinks the reform should begin at the upstream industry where oil and gas production has been steadily declining. "The core problem is in the upstream industry. If oil and gas production exceed the target, the fuel price policy will surely be affected," he explained. (ags)

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