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Photo from instagram\/shellselamba1<\/p>\n
Fuel shortages at private retailers such as Shell<\/a>, Vivo<\/a>, and BP-AKR<\/a> in recent weeks has caught public attention. Premium products disappeared from private refuelling stations and long queues frustrated drivers. For ordinary consumers, fuel problems are never isolated because they quickly affect transport costs, logistics and daily spending.<\/p>\n The government\u2019s quick fix was to suggest that private retailers buy their fuel supplies from Pertamina, the state-owned fuel giant. On the surface, this looked like a reasonable rescue measure. But, in reality, it suggests a more sinister agenda: <\/a>\u00a0bolstering the government\u2019s monopoly over fuel.<\/p>\n Our analysis reveals the troubling reality behind such shortages. Import licensing under the Neraca Komoditas (Commodity Balance)<\/a> system, along with \u00a0heightened state control efforts through state-owned enterprises (SOEs), have combined to create market distortions that ultimately hurt consumers.<\/p>\n \u2018Commodity Balance\u2019: \u00a0a misguided policy?<\/strong><\/p>\n The Commodity Balance is a new quota system in Indonesia\u2019s trade bureaucracy that uses supply and demand forecasts to determine how much firms are allowed to import or export each year.<\/p>\n It was introduced <\/a>to stabilise key commodities like fuel, salt, garlic, rice, sugar, and corn by matching supply with demand through quotas. In theory, imports will be allowed as long as anticipated demand exceeds the forecasted domestic supply. Once the import is approved, quotas and import permits will be valid for one year.<\/p>\n This annual quota aims to provide business certainty for firms that rely on intermediate input imports. Firms no longer need to repeatedly apply for permits throughout the year, reducing their administrative burden.<\/p>\n While this one-year quota system is a step forward, it often falls short in practice because actual demand can exceed the government\u2019s projections. Firms may request additional quotas, but in the commodity balance system, the revision process is riddled with uncertainty\u2014both in terms of timing and the amount that will eventually be approved.<\/p>\n When quota revisions fail businesses<\/strong><\/p>\n This uncertainty depends on when the technical ministries decide to process firms\u2019 applications, which can take more than two months, and whether the coordinating ministries choose to approve the quota revision at all. This means that the urgency surrounding revision is higher than the original quota bidding process.<\/p>\n In the case of fuel imports, the Ministry of Energy and Mineral Resources shortened the quota period in early 2025 from one year to six months<\/a>. The intent may have been to improve responsiveness to market changes. But it inadvertently shrinks the import quotas in every approval cycle. That means that when consumer demand spikes, shortages may be unavoidable.<\/p>\n In this situation, companies like Shell, Vivo, or BP AKR are required to apply for a quota revision to the Ministry of Energy. However, under the commodity balance system, the ministry holds full authority over whether such applications will be processed and approved or not.<\/p>\n Our analysis suggests that, in practice, the ministry is reluctant to process these revisions because its underlying goal is to push private retailers to source fuel from Pertamina, Indonesia\u2019s state-owned enterprise, which dominates fuel distribution. This seems to be working: already one private retailer<\/a> has caved in to the pressure.<\/p>\n Other problems from Commodity Balance<\/strong><\/p>\n Another problem is that government supply data is also too general to match industry demand data. While industry demand data is detailed into \u2018Harmonized System (HS) code\u2019 \u2013 an international trade classification system that specifies goods down to their grades and uses \u2013 government supply data is not. This often creates a hidden shortage situation, where domestic supply is abundant, but is the wrong type for industrial use.<\/p>\n While premium fuel is a recent case, other commodity balance commodities, such as corn and rice, have also suffered from this problem. Domestically grown corn is only suitable for direct consumption, not industrial use. So, corn production may be statistically sufficient, but the processed food industry still faces an industrial-grade corn shortage.\u00a0 This detail mismatch leaves businesses struggling to secure the inputs<\/a> they need in a timely manner.<\/p>\n At the consumer level, perceived scarcity may encourage hoarding, which worsens shortages and drives up prices. Yet, even when production is abundant and quality mismatch is not an issue, Commodity Balance still does not address distribution problems. This phenomenon is clear to see from \u00a0rice price increase<\/a>s due to the stockpiling mandate of rice SOE Bulog despite record harvests.<\/p>\n These weaknesses already make commodity balance a blunt instrument for ensuring availability and stabilising prices. But when this inflexible system is combined with SOE behaviour, distortions are produced \u00a0that directly hit consumer pockets.<\/p>\n