Massive Corruption in Indonesia’s Crude Oil Governance: State Loses IDR 193.7 Trillion

INDONESIAUPDATES.COM, News En – The Attorney General’s Office (Kejagung) has uncovered a massive corruption scandal in Indonesia’s crude oil and refinery product governance involving PT Pertamina’s subholding and Cooperation Contract Contractors (KKS) from 2018 to 2023. The corruption case has inflicted a staggering IDR 193.7 trillion ($12 billion) loss to the state.

Seven Suspects Named in Crude Oil Corruption Case

Director of Investigation at the Young Attorney General for Special Crimes (Jampidsus) Abdul Qohar announced on Monday (24/02/2025) that seven individuals have been named as suspects. They include:

RS – President Director of PT Pertamina Patra Niaga
SDS – Director of Feedstock and Product Optimization at PT Kilang Pertamina Internasional
YF – Representative from PT Pertamina International Shipping
AP – Vice President of Feedstock Management at PT Kilang Pertamina Internasional
MKAN – Beneficial owner of PT Navigator Equator
DW – Commissioner of PT Navigator Equator and PT Junggala Maritime
GRJ – Commissioner of PT Junggala Maritime and President Director of PT Orbit Terminal Merak

How the Corruption Was Executed

According to Qohar, the corruption involved manipulating crude oil imports and refinery product transactions. Several key elements contributed to the state’s financial losses:

Exporting Domestic Crude Oil at a Loss – Domestic crude oil, which should have been prioritized for national use as per Energy and Mineral Resources Ministerial Regulation No. 42 of 2018, was instead exported at a lower price.
Artificial Reduction of Refinery Production – Suspects RS, SDS, and AP allegedly manipulated refinery optimization meetings to justify cutting down domestic crude oil absorption.
Use of Brokers for Imports – Instead of utilizing locally available crude oil, Pertamina’s subholdings imported crude oil and refinery products through intermediaries at significantly higher prices.
Manipulation of Fuel Price Index (HIP) – These illicit practices affected the base price of fuel (BBM), which ultimately impacted market prices and government subsidies, burdening state finances.

Bigger Impact on Public and Economy

The fraudulent activities not only resulted in financial losses but also had wider economic implications. With artificially inflated fuel prices, public spending on transportation and goods increased, indirectly affecting inflation and economic growth.

“This case is a result of collusion between state officials, Pertamina’s subholdings, and brokers. The investigation has revealed illegal procurement of crude oil imports and refinery products at exorbitant prices,” Qohar emphasized.

Government’s Next Steps

The Indonesian government and law enforcement agencies are now focusing on preventing future occurrences of such large-scale corruption. Experts suggest implementing stricter audit mechanisms, enhancing transparency in oil procurement, and reforming the import regulation system.

As the investigation progresses, authorities are working with forensic accountants to determine the exact losses and legal actions against the perpetrators. Meanwhile, the public awaits further developments on whether the suspects will face severe penalties for their involvement in one of Indonesia’s biggest corruption scandals in the energy sector.

This crude oil corruption case serves as a stark reminder of the vulnerabilities in Indonesia’s energy sector governance. With the state suffering losses of IDR 193.7 trillion, it is crucial to enforce stricter policies to prevent similar fraudulent activities. The nation now looks toward legal proceedings to ensure accountability and justice.

Frequently Asked Questions (FAQ)

1. What is the Pertamina corruption case about?
The case involves large-scale corruption in crude oil and refinery product governance from 2018 to 2023, resulting in a financial loss of IDR 193.7 trillion.

2. Who are the key suspects in this case?
Seven individuals, including high-ranking officials from PT Pertamina’s subholdings, brokers, and private company representatives, have been named as suspects.

3. How did the corruption occur?
The corruption involved artificial reduction of domestic crude oil absorption, illegal crude oil exports, and overpriced crude oil and refinery product imports through brokers.

4. What impact does this corruption have on the public?
The scandal led to inflated fuel prices, affecting consumer costs, transportation expenses, and contributing to economic burdens such as inflation.

5. What actions is the government taking?
The government is conducting further investigations, forensic audits, and legal proceedings to ensure accountability and prevent similar corruption in the future.

6. How can similar cases be prevented in the future?
Stronger regulations, transparent procurement processes, independent audits, and stricter penalties for corruption in the energy sector are essential to prevent recurrence.

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