Indonesia is moving to bypass intermediary countries for the export of strategic natural resources, a policy designed to capture lost revenue and prevent neighboring nations from claiming Indonesian commodities as their own exports.
Coordinating Minister for Downstreaming and Energy Transition Bahlil Lahadalia issued a directive on November 2, 2026, at the Mineral and Coal Convention and Exhibition (Minerba Convex) in Jakarta, ordering the mining and energy sectors to ship products directly to final destinations. The mandate covers liquefied natural gas (LNG), coal, and minerals destined for major markets such as China, Japan, and South Korea.
The government’s push seeks to end the practice of routing shipments through third countries, which officials say allows intermediaries to benefit from taxation and trade balance reporting. Speaking at the convention, Bahlil instructed the Director General to ensure that natural resource exports no longer pass through certain transit countries.
I instruct the Director General to ensure that our natural resource exports no longer pass through certain transit countries. They must go directly to their destinations.
Bahlil Lahadalia, Coordinating Minister for Downstreaming and Energy Transition
Bahlil, who also serves as the energy and mineral resources minister, asserted that Indonesia is a sovereign nation that cannot be dictated to by others. He indicated that the regulation of export routes is essential for maintaining the trade balance, which he described as a foundation for the country’s economic growth. The minister admitted to repeatedly reporting these issues to President Prabowo Subianto, though he has not provided specific details regarding the total potential increase in state revenue or the exact economic benefits expected from the policy.
The directive also addresses the management of energy commodities, including the delivery of LNG. Bahlil noted that shipments through third countries allow those nations to gain profits through trade balance recording and taxation. This follows a government decision to reduce pipeline natural gas supplies to Singapore by 31 million standard cubic feet per day (MMSCFD) to prioritize domestic demand. Indonesia currently provides 148 LNG cargoes and approximately 409.5 MMSCFD of pipeline gas to Singapore from the Natuna Sea and Sumatra. Bahlil indicated that a portion of the LNG sent to Singapore is being re-exported to other countries rather than being used locally, adding that national resource sovereignty is non-negotiable. Officials confirmed that the reduction in supply remains within the bounds of minimum contractual commitments.
Bahlil also emphasized the need for production controls to protect commodity prices. He noted that downward adjustments to production have already begun to yield results, with coal prices reaching as high as US$154 per tonne in 2026. He argued that uncontrolled extraction could lead to oversupply and lower international prices. The government has utilized the Work Plan and Budget (RKAB) mechanism to manage national coal production. In 2025, Indonesia provided 540 million tonnes of coal, representing 43% of the 1.3 billion tonnes traded globally.
Production has been adjusted downward, but revenue has increased. That is what we want. We should not sell our commodities cheaply.
Bahlil Lahadalia, Coordinating Minister for Downstreaming and Energy Transition
Coordinating Food Minister Zulkifli Hasan expressed frustration over current crude palm oil (CPO) export conditions. He noted that while Indonesia is a leading producer of CPO, nickel, and tin, these goods often flow through neighboring countries before reaching their final buyers.
Indonesia is the world’s largest CPO, nickel and tin producer, yet our exports go through neighboring countries. That sometimes frustrates me.
Zulkifli Hasan, Coordinating Food Minister
Zulkifli cited a massive disparity between domestic selling prices and international market values. He noted that this situation has persisted for years and expressed a desire for direct exports to stop turning a blind eye to the issue.
CPO is priced at Rp 27,000 [US$1.50], but we sell it to our neighbor for Rp 15,000. That means we lose Rp 12,000. This has gone on for years. We no longer want to turn a blind eye.
Zulkifli Hasan, Coordinating Food Minister
Zulkifli framed the problem as a loss of control over Indonesia’s natural-resource supply chains, noting that the country surrenders potential gains to intermediary countries despite its status as a major producer. He also referenced other instances where he felt Indonesia bore costs, such as fuel shortages in Bali and forest fires.
To manage this transition, the government is centralizing export management through the state-owned entity PT Danantara Sumberdaya Indonesia (DSI). Bahlil stated that coordination with DSI is progressing well and that the entity will serve as a single gateway for exports. The transition period began on June 1, 2026, following Government Regulation No. 24 of 2026 regarding the management of strategic natural resource commodity exports. The initial commodities under this policy include ferroalloys, coal, and CPO. The full implementation of the DSI export mechanism is targeted for January 1, 2027, at the latest.
The Coordinating Ministry for Economic Affairs stated that DSI has already performed preliminary analyses of approximately 6,500 export declarations. These declarations are valued at more than US$14 billion and cover over 90 million tons of commodities across more than 100 countries. This initial review was intended to identify data inconsistencies and improve transaction visibility after DSI had been active for nearly three months. At the end of August 2026, the Coordinating Ministry for Economic Affairs and other agencies evaluated the first phase of the transition to the single-gateway system.