Indonesia May Buy Cheap Russian Oil: Jokowi – FT

Indonesian President Joko Widodo gestures during an interview in Bebatu, North Kalimantan province, in October 2021. File photo: Willy Kurniawan, Reuters.

Indonesian President Joko Widodo is considering buying Russian oil to reduce the pressure of rising energy costs, the Financial Times reported on Monday.

“We always monitor all of the options. If there is the country (and) they give a better price, of course,” Widodo said in an interview with the Financial Times when he was asked whether Indonesia would buy oil from Russia.

Earlier this month, Widodo hiked subsidised fuel prices by 30% and said that the price hike was his “last option” due to fiscal pressures.

Members of Indonesian labour groups protest outside Parliament in Jakarta over raised subsidised fuel prices, on Sept 6, 2022 (Ajeng Dinar Ulfiana, Reuters).

The move sparked protests across the nation of 270 million people, with thousands of protesters massing in Jakarta and other big cities last week to oppose the government’s move to cut its fuel subsidies.

But any move to purchase Russian crude at prices above the cap agreed by G7 countries could subject Indonesia to US sanctions.

In August, Tourism Minister Sandiaga Uno said that Indonesia had been offered Russian crude at a 30% discount. Following this, the country’s state-owned oil company, Pertamina, said it was reviewing the risks of buying Russian oil.

Southeast Asia’s largest economy, Indonesia posted an annual inflation rate of 4.7% in August, above the central bank’s target range of 2%-4% for a third straight month, due to high food prices.