At the end of February, the Indonesian Attorney General’s Office arrested and announced charges against five executives who work at subsidiaries of the state-owned oil and gas giant Pertamina.
A handful of executives from private firms were also charged. Investigators allege that between 2018 and 2023 the suspects conspired to defraud the public by importing oil at inflated prices and overcharging consumers for adulterated gasoline, incurring $12 billion in state losses.
Indonesia used to be a very oil-rich country. Much of Indonesia’s economic growth in the 1970s, for instance, was driven in part by oil exports. And Pertamina has been the central actor in exploring, developing and exporting Indonesia’s petroleum resources for decades.
As a consequence, it wields immense power within Indonesia’s political economy. For instance, Pertamina has a near total monopoly on retail sales of petroleum. There are a few private companies in the market, but they are mostly only in the largest cities and are few and far between.
For the vast majority of Indonesians, if they need fuel they have only one choice, which is to get it from a Pertamina station.
The other thing to know is that Indonesia is no longer as oil-rich as it once was. As petroleum reserves have been depleted over the years and domestic demand has grown, Indonesia has become a net oil importer.
Full story The Scandal at Indonesia’s State-Owned Energy Firm Pertamina, Explained – The Diplomat
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