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Energy Security in Indonesia


  • Budy P Resosudarmo
  • Ariana Alisjahbana
  • Ditya Agung Nurdianto


The issue of energy security has been a subject of discussions in Indonesia for a long time. However, until the end of the 1990s, it had never been at the centre of the country's policy debates. The sharp depreciation of Rupiah during the 1997/98 Asian financial crisis and increase in the price of crude oil in the early 2000s made it very expensive to control domestic prices of fuel and electricity through subsidies. With approximately 43 percent of the country's energy sources derived from crude oil, the amount of government spending on energy subsidies increased from almost nothing in 1996 to approximately 21 percent of total government expenditure in 2005. Whether the government could guarantee Indonesia's energy needs at an affordable price, and how to achieve it, has therefore become one of the hottest policy issues. This paper probes reasoning behind the current energy security policies and discusses some of the main policy challenges, paying special attention to the emerging interest on climate change issues.

Suggested Citation

  • Budy P Resosudarmo & Ariana Alisjahbana & Ditya Agung Nurdianto, 2010. "Energy Security in Indonesia," Departmental Working Papers 2010-08, The Australian National University, Arndt-Corden Department of Economics.
  • Handle: RePEc:pas:papers:2010-08

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    References listed on IDEAS

    1. Hartono, Djoni & Resosudarmo, Budy P., 2008. "The economy-wide impact of controlling energy consumption in Indonesia: An analysis using a Social Accounting Matrix framework," Energy Policy, Elsevier, vol. 36(4), pages 1404-1419, April.
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    Cited by:

    1. Yudha Prambudia & Masaru Nakano, 2012. "Integrated Simulation Model for Energy Security Evaluation," Energies, MDPI, Open Access Journal, vol. 5(12), pages 1-25, December.
    2. Gunningham, Neil, 2013. "Managing the energy trilemma: The case of Indonesia," Energy Policy, Elsevier, vol. 54(C), pages 184-193.

    More about this item


    energy; climate change and Indonesia;

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General


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