The Governor Of South Sumatra Welcomes The Government For Legalization Of People's Oil Wells

Governor of South Sumatra (Sumsel) Herman Deru. ANTARA/HO-South Sumatra Provincial Government

JAKARTA The government of President Prabowo Subianto is considered successful in taking strategic steps to strengthen national energy independence. One of the policies related to self-sufficiency in energy received praise from the Governor of South Sumatra (Sumsel) Herman Deru.

Heru views positively the legalization and development of people's oil wells run by the Ministry of Energy and Mineral Resources (ESDM) under the leadership of Minister Bahlil Lahadalia through the Minister of Energy and Mineral Resources Regulation Number 14 of 2025 regarding the legality of people's oil wells.

So far, people have processed the oil with an illegal label. With the birth of the Minister of Energy and Mineral Resources Regulation 14/2025, after the legalization with the conditions: MSMEs, BUMDs, and cooperatives, of course, this is a breath of fresh air," said Herman Deru when met by reporters on Tuesday, October 21.

According to him, this can help the regional economy because the government has prepared a scheme to purchase 80 percent of the people's oil production from the Indonesian Crude Oil Price (ICP). This policy is expected to provide certainty of income for miners while encouraging production activities to run under official regulations.

"Moreover, this price was increased, in the past 70 percent of the ICP, now Pertamina has received 80 percent of the ICP price," he said.

Separately, Sriwijaya University (UNSRI) Energy Expert, M. Taufik Toha, said the policy was a new milestone in national energy governance. He said that in Musi Banyuasin (Muba), South Sumatra, the number of mining people's oil wells is very large and needs to be regulated.

"That (people's oil wells) really need policy. Because in our village there are already rules. So anyone who wants to be allowed to operate must follow the applicable rules," he said in an energy policy discussion in Palembang, Tuesday, October 21.

According to Taufik, the approach taken by Minister Bahlil in legalizing people's oil wells is oriented to security, justice, and public participation. This is stated in the Ministerial Regulation (Permen) of Energy and Mineral Resources Number 14 of 2025.

"The legality of the community's oil wells provides legal certainty and permission for oil wells that previously operated independently by the community," said Taufik quoting one of the contents of the candy.

He explained, with the legalization of people's drilling activities, the government can implement direct K3 (Security and Health of Work) supervision in the field. This is to minimize the risk of fires, explosions, and environmental pollution due to drilling previously carried out without safety standards.

In the same forum, UNSRI economist, Dr. M. Subardin, assessed that the legalization of people's oil wells is a clear proof of the state's presence in regulating and prospering the people. This is because the policy will greatly increase the security and income side because of the certainty of selling oil products that are mined.

"If the community is an official legal entity such as cooperatives or MSMEs, they can pay taxes. So it's legal. From there you can only do K3," he explained.

In addition, according to Subardin, the granting of official permits to the public allows the potential for tax loss to be resolved. This is because all oil sales activities can be monitored directly. "There are around 10 thousand people's oil wells in Muba. That's the potential for tax loss of around Rp7.02 trillion. With this legalization, the potential for tax loss can be resolved," he said.

Meanwhile, UNSRI Public Policy Expert, Dr. Andries Lionardo, assessed that the synergy between institutions under the coordination of Minister Bahlil was the key to the success of this program. Efforts to supervise, evaluate, and joint commitment are the keys. Therefore, all policy actors, both at the village, sub-district/city, provincial, and ministry levels, must work together and collaborate to realize energy independence and justice," he said.