Seven officials arrested as investigation reveals fraudulent oil management practices between 2018 and 2023.

Indonesia’s Attorney General’s Office (Kejagung) exposed a massive corruption scandal in the management of crude oil and refinery products, resulting in state losses of IDR 193.7 trillion (SGD 16.08 billion). Seven individuals, including top executives of PT Pertamina subsidiaries and private sector figures, have been arrested. The scandal, which spanned 2018 to 2023, involved illegal practices such as manipulated imports, rejection of domestic supply, and fraudulent brokerage deals.

Indonesia’s oil and gas industry plays a vital role in the national economy, making the sector a frequent target for corruption. The latest revelations from Kejagung exposed systemic fraud in crude oil management within PT Pertamina and its subsidiaries, leading to significant financial losses. Investigators found that high-ranking officials engaged in unlawful schemes that prioritized oil imports through intermediaries rather than using domestic supply, artificially inflating costs for illicit financial gains.

How the Scheme Unfolded

According to Abdul Qohar, Director of Investigation at the Attorney General’s Office, the corruption case centers on violations of Ministerial Regulation No. 42/2018, which mandates that domestic crude oil must be used before imports are considered. However, investigators found that Pertamina executives deliberately reduced refinery production, leading to an artificial shortfall in local oil supply.

This artificial shortage allowed them to justify importing crude oil at inflated prices through brokerage firms, despite available domestic alternatives. To further manipulate the process, they falsely claimed that oil from domestic contractors did not meet refinery specifications, a claim proven to be unfounded by technical assessments.

As a result, while state-owned oil was being exported, Pertamina subsidiaries engaged in unnecessary imports through intermediaries, leading to financial discrepancies amounting to IDR 193.7 trillion (SGD 16.08 billion).

The Seven Officials Behind the Fraud

Authorities have detained seven individuals linked to the case, each playing a crucial role in executing the fraudulent scheme.

1. RS, President Director of PT Pertamina Patra Niaga, allegedly led the execution of manipulated oil transactions.
2. SDS, Director at PT Kilang Pertamina Internasional, was responsible for optimizing feedstock and refinery operations, allegedly coordinating artificial shortages.
3. YF, President Director of PT Pertamina International Shipping, facilitated the logistical aspect of oil imports and exports.
4. AP, VP of Feedstock Management, ensured that domestic crude oil was systematically rejected in favor of more expensive imports.
5. MKAN, Beneficial Owner of PT Navigator Khatulistiwa, played a key role in the brokerage chain, allegedly inflating import costs.
6. DW, Commissioner at PT Navigator Khatulistiwa and PT Jenggala Maritim, was involved in structuring offshore transactions to obscure financial flows.
7. YRJ, Commissioner of PT Jenggala Maritim and Director of PT Orbit Terminal Merak, allegedly managed the financial aspects of the fraudulent deals.

These individuals were taken into custody on February 24 and will remain in detention for at least 20 days as investigations continue.

The Broader Implications for Indonesia’s Energy Sector

This corruption case underscores deeper structural issues in Indonesia’s energy management, particularly in state-owned enterprises. It exposes loopholes in regulatory oversight that have allowed unchecked discretion among industry executives. The reliance on brokers to facilitate crude oil imports has not only increased costs but also reduced efficiency in the national energy supply chain.

Economic analysts warn that unless governance reforms are implemented, similar schemes could continue to drain public funds. Strengthening regulatory compliance, increasing transparency in procurement, and eliminating unnecessary intermediaries will be critical in restoring credibility to Indonesia’s oil sector.

The exposure of this scandal marks a significant step in Indonesia’s fight against corruption, but it also highlights the urgent need for systemic reform in oil governance. With state losses reaching IDR 193.7 trillion (SGD 16.08 billion), policymakers must take immediate action to enforce stricter regulations and hold accountable those who exploit national resources for personal gain. Strengthening oversight mechanisms and enhancing transparency in crude oil procurement will be key to preventing future abuses within the energy sector.

Sources: Ulasan (2025), CNBC Indonesia (2025)

Keywords: Indonesia Oil Scandal, Pertamina Corruption, Government Losses, Energy Fraud, Crude Oil Imports