Why Are Shell and BP Gas Stations Facing Fuel Shortages in Indonesia?

In recent weeks, motorists across Indonesia have grown more upset when visiting Shell and BP gas stations, only to discover that certain types of gasoline particularly higher-octane, non-subsidized variants, were either unavailable or sold out sooner than expected. This has prompted widespread public worry and speculation. Is this just a momentary logistical setback, or does it indicate more serious regulatory and policy issues in Indonesia's petroleum delivery system?

The solution, as it turns out, is complex. Shifting government policy, increased demand for non-subsidized fuel, and restricted import quotas have made it challenging for commercial fuel sellers like Shell and BP.

How the shortages began.

• Visible Shortages at Private Stations

Since late August 2025, reports have surfaced that numerous Shell and BP gas stations are running low on specific fuel kinds, particularly gasoline with octane levels of RON 92 or above. While diesel and basic fuel options were still available in most stores, the selective shortage immediately became a talking point among premium gasoline users.

• Regulatory Changes on Import Permit

One of the most major factors causing this shortage is the government's decision to modify the terms of import permits. Previously, private petroleum firms were granted annual import licenses, allowing them to manage supply and logistics with greater assurance. However, under the current guidelines, these permits are only good for six months and will be reviewed every three months. This causes uncertainty, interferes with long-term planning, and exposes private shops to unexpected regulatory changes.

• Import quotas

Even though the government permitted a 10% increase in the import quota over the previous year, this increase has proven insufficient. Demand for non-subsidized fuel has increased dramatically, thanks in part to changes in subsidy eligibility, which limited access to cheaper state-subsidized fuel and pushed more consumers to Shell and BP outlets. As a result, the increased limit was quickly exhausted, leaving shops unable to keep up with demand.

• Reliance on Pertamina

To solve the shortage, the government has urged Shell and BP to collaborate more closely with Pertamina, Indonesia's state-owned oil and gas company. This includes acquiring "base fuel" from Pertamina and blending it independently to satisfy brand specifications. While this technique may give temporary relief, it raises concerns about competitiveness and market fairness, as private firms become more reliant on a government-owned competitor for supply.

Key Causes of the Shortage

Several overlapping variables contributed to the situation:

• Frequent Permit Evaluations: The transition from annual to semi-annual permits, combined with quarterly evaluations, has made it difficult for private enterprises to maintain stable and predictable import schedules. This unpredictability causes delays in cargo security and affects logistics planning.
• Rising Demand for Non-Subsidized Fuel: As the government limits access to subsidized fuel through mechanisms such as QR code restrictions and engine capacity regulations, more consumers are being drawn into the non-subsidized fuel market, which is dominated by Shell and BP.
• Slow Import and Distribution Processes: Even once permits are issued, the process of hiring shipping vessels, unloading petroleum at terminals, and distributing it countrywide can be slowed by bureaucratic and infrastructure constraints.
• Quota Constraints and Dependence on Pertamina: Although the government increased import limits significantly, the increase in demand greatly outweighed the greater allocation. This forces Shell and BP to rely on Pertamina for fuel, blurring the distinction between competitor and provider.

Conclusion

The recent shortages at Shell and BP gas stations underscore the fine line between government control, market competitiveness, and consumer requirements. While Indonesia's officials are rightfully concerned with managing subsidies and ensuring national petroleum security, the introduction of frequent permission reviews and import limitations has had unexpected implications.

For consumers, this means fewer options and sometimes frustration at the pump. Individual businesses face operating uncertainty and greater reliance on their government-owned competition. The government faces a difficulty in regulating successfully without weakening the very competition that benefits consumers and encourages efficiency.