Indonesia Oil Refining Market Overview, 2030

Indonesia’s oil refining industry is entirely controlled by state-owned Pertamina, which operates a network of aging refineries across the country, including major plants in Cilacap, Balikpapan, Dumai, and Plaju. These facilities collectively have a total refining capacity of around 1.2 million barrels per day, but this is insufficient to meet the country’s rising fuel demand, forcing Indonesia to import over 40% of its refined petroleum products. The refining infrastructure has struggled with underinvestment and outdated configurations, which limit flexibility in producing cleaner fuels and higher-value products. In response, the government launched two major initiatives the Refinery Development Master Plan (RDMP) and the Grass Root Refinery (GRR) program. RDMP involves upgrading existing facilities to increase capacity and improve fuel quality, while GRR focuses on constructing new refineries in locations like Tuban and Bontang. However, many of these projects have encountered delays due to funding gaps, environmental concerns, and global energy market disruptions. The refining sector is closely integrated into Indonesia’s broader energy value chain, with heavy involvement in transportation fuels, petrochemicals, and industrial energy. Pertamina also pursues vertical integration by managing retail fuel stations and distribution networks. Geopolitical factors such as OPEC+ pricing policies and regional supply chain pressures influence crude procurement strategies. At the same time, Indonesia’s commitment to energy transition is reshaping refinery objectives, particularly through increased biofuel blending mandates such as B35 (35% biodiesel), which has become a national strategy to reduce fossil fuel dependence and crude import bills. As part of its decarbonization goals, Pertamina has started piloting green refinery upgrades, hydrogen co-processing, and efforts to produce sustainable aviation fuel (SAF), supported by energy ministry policies and carbon reduction frameworks.

According to the research report ""Indonesia Oil Refining Market Overview, 2030,"" published by Bonafide Research, the Indonesia Oil Refining market is anticipated to grow at more than 6.17% CAGR from 2025 to 2030. The country’s domestic fuel consumption exceeded 1.6 million barrels per day in 2023, outpacing local refining output and prompting continued reliance on imported diesel, gasoline, and jet fuel. The government’s push for energy independence has prioritized downstream capacity additions, but execution remains a challenge. RDMP upgrades at Balikpapan and Cilacap are progressing slowly, with Balikpapan’s expansion expected to boost capacity by 100,000 barrels per day by 2025. The Tuban GRR project, a joint venture with Rosneft, has faced multiple timeline adjustments. Despite these hurdles, Indonesia remains committed to boosting national refining output. Fuel subsidies, particularly for diesel and kerosene, continue to shape consumption trends, creating price controls that distort market signals. Regulatory frameworks now emphasize biofuel integration, with the B35 mandate being one of the world’s most aggressive biodiesel blending targets. While biofuel policies aim to reduce dependency on imports and support palm oil-based energy, they also create technical and logistical challenges for existing refineries. Indonesia’s refining margins remain volatile due to global crude price fluctuations, high feedstock costs, and suboptimal product slates. Opportunities exist in digital refinery upgrades, co-processing renewable feedstocks, and hybrid operations incorporating green hydrogen. However, constraints persist, including environmental permitting delays, ESG-related funding barriers, and infrastructure gaps in crude and product logistics. In 2024, the Indonesian government reaffirmed support for its refinery expansion roadmap through budget allocations and regulatory simplification efforts, though investor appetite remains cautious amid rising global clean energy momentum.

Diesel remains a dominant fuel across transport, industry, and agriculture sectors, especially in freight logistics, mining, and farming activities that require high energy density fuels to power vehicles and machinery throughout the archipelago. The vast rural and industrial demand keeps diesel consumption elevated despite rising efforts for cleaner alternatives. Gasoline use is growing steadily in urban centers and motorbike-heavy regions such as Jakarta, Surabaya, and Bali, where two- and three-wheelers form a major part of personal transport. This growth reflects increasing urbanization and rising disposable incomes. Jet fuel demand is rising significantly due to the rebound in air travel and tourism in major airport hubs like Jakarta’s Soekarno-Hatta, Bali’s Ngurah Rai, and Surabaya’s Juanda airports. The aviation sector’s recovery from COVID-19 lockdowns has pushed fuel consumption upward. LPG sees heavy usage in residential households, promoted by the national government’s cooking gas conversion program aiming to replace traditional biomass and kerosene in rural and urban homes. Asphalt demand remains steady and growing as the government pursues extensive infrastructure projects to enhance connectivity across islands. Fuel oil continues to play a limited role, mainly in industrial and power generation sectors, but its share is declining amid environmental regulations. Lubricants are essential for industrial machinery and transport maintenance, supporting manufacturing and fisheries sectors. The fuel consumption trends illustrate Indonesia’s mixed energy needs across densely populated urban areas and dispersed rural regions, balanced with government initiatives to promote cleaner fuels and infrastructure development.

Road transport remains the primary consumer of refined fuels, with freight, logistics, and personal vehicles accounting for the majority of demand. Indonesia’s sprawling islands require extensive transportation networks, and road transport is critical for goods movement and commuter travel. Aviation fuels consumption is increasing sharply, closely tied to the recovery of the tourism industry and expanded domestic and international air routes. Key aviation hubs like Jakarta, Bali, and Surabaya have seen rising jet fuel consumption due to increasing passenger volumes. Marine fuel bunkering supports Indonesia’s large merchant fleet and numerous port operations across its archipelago, providing bunker fuel for domestic shipping, fishing vessels, and international maritime traffic. Major bunkering ports include Jakarta, Surabaya, and Balikpapan. LPG plays a pivotal role in the residential and commercial sectors, particularly through government-led efforts promoting LPG adoption as a cleaner alternative to traditional fuels in cooking. The petrochemical industry is smaller but growing, supported by refinery-linked feedstock supply chains. Electricity generation uses refined fuels to a limited extent, primarily in remote areas where grid access is unreliable. Other niche applications include rail transport, domestic waterways, and agriculture, with diesel being the preferred fuel. This application landscape highlights the varied energy demand driven by Indonesia’s unique geography and economic structure, emphasizing transport, aviation, and residential energy needs.

Indonesia’s refinery feedstock mix is characterized by a combination of imported crude oil and domestic production, reflecting the country’s resource endowment and import reliance. Crude supplies primarily come from the Middle East and Africa, sourced through long-established trade routes and regional partnerships. Indonesia’s own domestic crude output originates from mature fields in Sumatra and Kalimantan, contributing a portion of refinery inputs, although overall domestic production has declined in recent years. Natural gas liquids (NGLs) are present but limited in refining capacity, with a stronger focus on oil crude feedstocks. The country has been increasing biofuel blending, particularly palm-based biodiesel blends ranging from B35 to B40, aligning with government mandates aimed at reducing fossil fuel dependence and promoting renewable energy. This biofuel integration leverages Indonesia’s status as a leading palm oil producer, supporting local agriculture and sustainability goals. Biomass and alternative feedstocks remain marginal in the refinery feed mix but are areas of growing interest. Coal tar and other unconventional feedstocks are negligible in Indonesia’s refining sector. The feedstock profile is influenced by regional geopolitics, price volatility, and supply security considerations, prompting Indonesia to diversify crude sources and invest in domestic production enhancements where feasible. Refiners continue to optimize feedstock slates to accommodate refinery configurations and fuel quality standards. Indonesia’s feedstock landscape balances imports, domestic oil production, and increasing biofuel incorporation.

Indonesia’s refinery complexity remains relatively low to medium, with most operational facilities classified as topping or hydro-skimming refineries focusing on producing basic fuels like gasoline, diesel, and jet fuel. The country’s major refineries, including those at Balikpapan, Cilacap, and Dumai, primarily use simple configurations with limited conversion and upgrading capabilities. However, significant upgrade projects are underway, notably the Refinery Development Master Plan (RDMP) and Grassroots Refinery (GRR) initiatives, aimed at increasing capacity, complexity, and self-sufficiency. The Balikpapan and Cilacap refineries are undergoing hydro-skimming upgrades to improve fuel yields and environmental compliance, with delayed coking and hydrocracking units planned or under construction to handle heavier feedstocks and produce higher-value products. The planned GRR refinery at Tuban, originally slated to be a deep conversion refinery with advanced processing units, has faced delays but represents the long-term government vision for a more complex and independent refining sector. Environmental regulations drive upgrades focused on sulfur reduction and emissions control. Indonesia is also pushing for greater refinery self-sufficiency to reduce fuel imports and improve energy security. These modernization efforts are supported by partnerships with international oil companies and technology providers to ensure access to cutting-edge refining techniques. Investment in digitalization and automation is also increasing to optimize refinery operations and maintenance. The government emphasizes aligning refinery outputs with domestic fuel quality standards and export market requirements.

Considered in this report
• Historic Year: 2019
• Base year: 2024
• Estimated year: 2025
• Forecast year: 2030

Aspects covered in this report
• Oil Refining Market with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Fule Type
• Gasoline
• Diesel/Gasoil
• Jet Fuel
• LPG
• Fuel Oil
• Others (Lubricants, Asphalt)

By Application
• Road Transportation
• Aviation
• Marine Bunker
• Petrochemical Industry
• Residential & Commercial
• Electricity Generation
• Others (Rail & Domestic Waterways, Agriculture)

By Feedstock
• Crude Oil
• Natural Gas Liquids (NGLs)
• Biomass
• Others (Coal Tar, etc.)

By Complexity Type
• Topping
• Hydro-skimming
• Conversion
• Deep Conversion
• Others Show more