JAKARTA :Indonesia's private fuel retailers are facing gasoline shortages due to a jump in demand as consumers shift away from state-owned Pertamina following concerns over its fuel quality and as the government capped imports.

Many fuel stations operated by companies such as Shell, BP, and others have run out of gasoline and are left selling only diesel, frustrating customers.

WHY DID FUEL DEMAND AT PRIVATE RETAILERS SURGE?

Indonesia's Attorney General in February named former executives of Pertamina suspects in a corruption probe, alleging that they issued instructions to blend lower-grade gasoline into its 92-octane grade, which could cause problems for vehicle engines. The state energy firm has denied this and pledged to improve transparency.

Still, many consumers switched to private retailers.

The shift was also driven by Pertamina's gradual move starting late last year requiring that customers register for a QR code to buy subsidised petrol, the energy ministry said in a parliamentary hearing on Wednesday. Only Pertamina sells subsidised gasoline in Indonesia.

Daily sales volume of Pertamina's subsidised 90-octane gasoline dropped by 5 per cent this year through July, while industry-wide sales of non-subsidised grades rose 19 per cent, the ministry data showed.

The ministry expects Pertamina's sales of non-subsidised gasoline to increase 14 per cent to 7 million kilolitres (44 million barrels) this year, while sales by private companies are expected to surge 91 per cent to 1.35 million kilolitres.

Pertamina's market share of unsubsidised gasoline in January-July this year dropped to 85 per cent, from 89 per cent in 2024, the ministry said.

WHY DON'T PRIVATE RETAILERS IMPORT MORE FUEL?

In June, Shell and BP-AKR, a joint venture that operates BP stations, requested additional gasoline import quotas after demand surged, company executives told a parliamentary committee this week.

On July 17, Indonesia's energy ministry issued a letter to the country's five private gasoline retailers stating that their 2025 gasoline imports were capped at 10 per cent above what each sold last year.

The limit was intended to maintain a healthy commodity balance sheet, said Laode Sulaeman, a senior official at the energy ministry.

CAN PRIVATE RETAILERS IMPORT THROUGH PERTAMINA?

The government last month instructed private companies to import through Pertamina, which still has 6.81 million kilolitres of unused import quota for 2025, according to Laode.

Pertamina has agreed to import base fuel, which has not been dyed or mixed with additives, for the private companies, with the first such cargo, containing 100,000 barrels, intended for private companies arriving last week.

WHAT'S HOLDING PRIVATE RETAILERS BACK FROM BUYING BASE FUEL FROM PERTAMINA?

There have been some obstacles preventing the retailers from buying fuel from Pertamina.

Pertamina said last week that retailer Vivo, an affiliate of Vitol, agreed to buy 40,000 barrels of the first import cargo. However, the deal fell through as the fuel contained ethanol, said Achmad Muchtasyar, an executive at Pertamina Patra Niaga, the company's trading arm, at the hearing this week.

BP-AKR, which also sought to buy a portion of 100,000-barrel shipment, asked Pertamina to produce a certificate of origin for the fuel to show that the cargo was not sourced from sanctioned producers, which was not made available, Vanda Laura, chief executive of the joint venture, told the parliamentary hearing.

Shell said at the hearing that it was in early-stage talks with Pertamina, conducting due diligence.

Explainer-Why do private gasoline retailers in Indonesia face shortages?