GOVERNMENT STRATEGIES TO ENHANCE THE PROVISION OF OIL BUFFER RESERVES FOR STRENGTHENING NATIONAL ENERGY RESILIENCE

Abstract

Indonesia remains highly dependent on fossil fuels, particularly oil, to meet its growing energy needs in the transportation sector. However, the country has yet to establish an adequate strategic oil reserve, leaving it vulnerable to global oil crises and potential supply disruptions. This study aims to analyze government strategies to enhance the provision of oil buffer reserves in Indonesia. It also explores alternative policy directions for the government, focusing on two key approaches: accelerating the transition to electric vehicles and strengthening existing oil infrastructure to enhance national energy resilience. The study employs a qualitative literature review method by analyzing 33 selected documents based on relevance, publication year, and methodological rigor. Findings indicate that transitioning to electric vehicles could reduce oil consumption by 1.5 million barrels per day (equivalent to USD 116.6 million), lower CO₂ emissions by 572.4 million kilograms, and generate USD 5.72 million from carbon trading. Meanwhile, developing domestic oil refineries could yield an economic value of USD 1.22 billion per crude oil processing transaction, while digitalization in the oil sector improves efficiency and prevents fraud. These findings demonstrate that enhancing the provision of oil buffer reserves through energy diversification and digital transformation can significantly strengthen Indonesia’s energy resilience. To support these strategies, this study recommends implementing digital technologies, reallocating fuel subsidies to support the adoption of electric vehicles or refinery development, and conducting further research on subsidy reallocation mechanisms.