BPH Migas: Downstream Drives Economic Growth And Energy Transition

JAKARTA - The Downstream Oil and Gas Regulatory Agency (BPH Migas) stated that downstream oil and gas is one of the main drivers of national economic growth because it is able to create added value, and strengthen energy transition efforts towards net zero emissions.

"Downstreaming of oil and gas is one of the keys to the success of downstreaming in Indonesia because it is related to petrochemicals, refinery, and provides a very significant added value for the oil and gas industry, especially in the downstream sector," said Member of the BPH Committee on Oil and Gas Fathul Nugroho in a statement received in Jakarta, Saturday.

Speaking at the 2025 Mineral & Energy Summit UI Seminar, Fathul said that downstream oil and gas is one of the attractions of investment, and is a powerful policy to expand employment for the community. He emphasized his commitment to accelerate the downstream oil and gas program.

According to Fathul, downstream oil and gas demand strong infrastructure readiness, starting from crude oil processing facilities to fuel oil (BBM) and other added-valued derivative products. The existence of a fuel and liquided Petroleum Gas (LPG) terminal is also considered to play a vital role in maintaining the stability of national energy supply through optimal storage and distribution.

Another important infrastructure, he said, is pipelines and natural gas transportation to increase distribution efficiency, reduce logistics costs, and strengthen energy security.

"In addition, petrochemical facilities to support the production of domestic industrial raw materials and suppress imports," he said.

According to him, the current downstream oil and gas achievement is also starting to look real. The integrated petrochemical factory in Cilegon, Banten, which was recently inaugurated by President Prabowo Subianto, is considered an important milestone that shows Indonesia's ability to process its own natural resources while creating job opportunities for the younger generation.

Downstreaming of oil and gas, especially natural gas, said Fathul, also has a strategic role in supporting the energy transition to net zero emissions (NZE) by 2060 or sooner. Natural gas is a cleaner energy bridge and is able to accelerate the achievement of renewable energy targets.

"Currently we are heading for an energy transition. That is, we not only depend on fuel fossils, but also on plant-based fuel," he said.

Regarding environmentally friendly fuels, Fathul said that the B40 (Biodiesel 40 percent) Program had been implemented since January 2025. Meanwhile, the E10 Program (Etanol 10 percent) is targeted to start running in 2027, as part of the Government's move to expand the use of clean energy.

Expert Staff to the Minister of Energy and Mineral Resources (ESDM) for Commercialization and Transportation of Oil and Gas Satya Hangga Yudha, on the same occasion, said the B40 program reduced Indonesia's dependence on imports, especially diesel oil imports.

With reducing oil imports, he said, it will save the country's foreign exchange. He also emphasized the need for synchronization between fuel and renewable energy fossils to achieve the NZE 2060 target or sooner.