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View all search resultsIndonesia’s gas policy must deliver more than energy sovereignty
By choking off gas to Singapore to fuel the domestic industry, Jakarta is gambling that resource nationalism can build real economic muscle rather than simply leave stranded promises in its wake.
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The sprawling Plaju refinery of state-owned energy giant Pertamina stands alongside a green space and residential settlement in South Sumatra’s provincial capital Palembang on Oct. 24, 2018. (Antara/Nova Wahyudi)
I
ndonesia’s decision to reduce natural gas exports to Singapore is more than an energy dispute; it is a test of whether resource nationalism can deliver the industrial transformation Jakarta has long promised.
On Oct. 24, Indonesia began cutting pipeline gas supplies by 31 billion British thermal units per day (BBtud), comprising 15 BBtud from Natuna and 16 BBtud from Sumatra.
The government argues that domestic demand, particularly from the planned petrochemical industry, must take priority. The objective is understandable, but its economic merits will depend on what Indonesia can produce with the gas it retains.
Natural gas serves two competing purposes. Exports generate foreign exchange, while domestic consumption can support manufacturing, fertilizer production and petrochemicals. The central question is not whether domestic use is preferable to exports in principle, but which allocation creates greater economic value.
Indonesia exported 14.04 million tonnes of natural gas in 2025, down 9.4 percent from the previous year. Singapore accounted for 3.22 million tonnes, worth approximately US$1.66 billion.
Meanwhile, Indonesia held proven gas reserves of 34.78 trillion cubic feet. Yet abundant reserves do not automatically translate into affordable, reliable supplies for domestic manufacturers.
Indonesia already directs most of its gas toward domestic consumption. The Energy and Mineral Resources Ministry reported that gas utilization reached 5,600 BBtud in 2025, of which 3,908 BBtud, or 69 percent, served domestic needs. Exports accounted for the remaining 1,691 BBtud.
