Inside Shell’s purchase and why it matters
Shell has agreed to purchase 100,000 barrels of gasoline from Indonesia’s state energy company Pertamina, according to Deputy Energy and Mineral Resources Minister Yuliot Tanjung. The deal comes after months in which certain gasoline grades were unavailable at private fuel stations across Indonesia. The government capped private retailers’ import quotas this year, then instructed companies to source additional supply through Pertamina, a shift that left many Shell, BP, and Vivo outlets short of gasoline even as diesel remained available. Officials say sales to other private operators are moving in parallel, including a similar 100,000 barrel purchase by BP and a shipment of comparable size for Vivo.
The arrangement is designed as a single gate for imports, with Pertamina securing base gasoline that private companies can blend to match their branded product specifications. Shell has said it aims to restore normal distribution while maintaining procurement and quality standards. The company had adjusted operating hours and staffing earlier in the year as shortages spread from late August. This purchase, and the broader framework behind it, marks a concrete step to refill private pumps and reduce long lines at stations where gasoline temporarily ran out.
How policy shifts set the stage
Indonesia ended Pertamina’s legal monopoly in 2004, but the state company still dominates retail sales and imports. To prevent inventory imbalances this year, the government capped imports for private retailers at volumes tied to past sales, then eased the constraint by allowing them to bring in more gasoline via Pertamina. Energy officials said the aim is stable supply and public access to fuel, while giving private firms a route to obtain non subsidised gasoline. The antitrust regulator has warned that strict caps can limit consumer choice and tilt the market toward the incumbent, which is why authorities moved to open a channel for additional supply before the year end.
At a government briefing, Energy Minister Bahlil Lahadalia explained that Pertamina would procure base gasoline that private companies can blend themselves to meet their brand and grade requirements.
Bahlil Lahadalia said Pertamina will supply the companies with base fuel, without mixtures of additives, so private companies can do their own blending.
Officials also pointed to untapped room in the national import plan. Pertamina’s downstream unit had about 7.52 million kilolitres of unused import quota available in recent months, according to the energy ministry, which it could use to channel fuel to private brands. A portion of that is expected to meet private retailers’ needs to the end of the year. Authorities said deliveries to BP were arranged in late October and that Vivo has also taken cargoes. Shell’s 100,000 barrel purchase follows those steps, with the deputy minister confirming the agreement and transit to an agreed delivery point.
Quality concerns, ethanol content, and why specifications matter
Several private retailers hesitated over early offers of imported cargoes because of technical specification and documentation issues. Vivo initially agreed to take part of a 100,000 barrel shipment, then balked when tests detected roughly 3.5 percent ethanol in the gasoline. That level is under Indonesia’s regulatory ceiling for ethanol blending in gasoline, but it did not match some private brands’ product requirements for premium grades. The company later received a separate cargo of around 100,000 barrels. BP asked for a certificate of origin on an offered shipment to confirm the fuel did not come from a sanctioned producer. Those questions slowed the first wave of restocking but helped clarify the terms for subsequent deals.
The government’s framework relies on Pertamina importing base gasoline rather than finished branded products. Base gasoline is refined fuel that meets a given octane rating (for example RON 92) before a retailer adds its proprietary additive package. Additives can include detergents to keep injectors clean, corrosion inhibitors, or friction modifiers. Each brand may also have specific color or dye standards for product recognition. By supplying base fuel without additives, Pertamina allows private firms to blend it in line with their brand specifications, then sell it as their own product.
Quality control remains central to rebuilding customer confidence. Officials have said that incoming cargoes offered to private operators undergo joint inspection, with an independent surveyor checking quantity and key specifications before delivery. That process helps address concerns raised earlier this year when a corruption probe into Pertamina fueled public debate over gasoline quality. Pertamina denied wrongdoing and pledged more transparency. Private brands, whose growth depends on consistent fuel quality, have leaned on testing and clear documentation to reassure customers.
How demand shifted and why private stations ran dry
Private stations saw a demand spike in 2025 as more drivers sought non subsidised gasoline from Shell, BP, Vivo and others. The trend accelerated after allegations that Pertamina had blended lower grade components into its 92 octane product, a claim the company rejected. New requirements for QR code registration to buy subsidised gasoline at Pertamina outlets also nudged some motorists toward private brands that focus on higher octane grades. Private retailers’ imports, however, were capped at 10 percent above the prior year’s sales. Demand increased more quickly than expected, which meant some companies hit their cap well before the year end and could not bring in additional cargoes on their own.
Industry data indicates sales of non subsidised grades rose about 19 percent through mid year, while private companies’ annual sales of those grades were projected to jump by around 91 percent. Pertamina’s share of the non subsidised gasoline market slipped to roughly 85 percent, from about 89 percent in 2024. Private retailers asked for extra import space in June as their inventories tightened. When the ministry opened the pathway to import via Pertamina, shipments began to flow but not fast enough to prevent temporary stockouts at many private stations. Some locations sold only diesel for days at a time while waiting for gasoline replenishment.
What 100,000 barrels means for drivers
One hundred thousand barrels equals about 15.9 million litres of gasoline (1 barrel equals 159 litres). A typical passenger car in Indonesia may hold 40 to 50 litres per fill, so the volume Shell is taking could cover several hundred thousand refuelling transactions once it is distributed. That is a meaningful boost for a network that has run dry on certain grades. It will not alone stabilize an entire private retail system that spans many cities, but it relieves the most acute shortfalls and buys time for additional cargoes to arrive.
Parallel imports have already helped. BP restocked after purchasing 100,000 barrels through Pertamina. Vivo, after early specification disputes, has started taking new shipments of roughly that magnitude as well. The staggered schedule of arrivals means inventories at private stations should rebuild in steps, with gasoline returning to forecourts that have posted out of stock notices since late August. Availability by grade will vary by brand and location, since each company prioritizes different products and regions.
Near term supply outlook
Energy officials say private operators submit demand volumes to Pertamina’s retail unit, which then lines up cargoes that meet agreed technical specifications. The aim is to move fuel to the private networks within days of arrival at Indonesian ports. The blending model is straightforward. Pertamina supplies additive free base gasoline at the agreed octane level, private brands add their own detergent and performance packages, and the result is the finished product that matches what customers expect at the pump.
Indonesia’s national fuel buffers remain healthy. Pertamina has said its reserves cover about 18 to 21 days of gasoline demand, which secures the broader market even when private retailers experience localized outages. The primary risk now is coordination. Cargoes must arrive in time, pass joint inspection, and be dispatched efficiently to retail sites. The government has framed the single gate approach as a way to keep supply steady while avoiding a scramble for limited import quotas at the end of the year.
Competition concerns are part of the debate. Indonesia’s competition watchdog has warned that rigid caps on private imports reduce consumer choice and could reinforce Pertamina’s large share. Policymakers counter that the current mechanism is a pragmatic response to unexpected demand and documentation issues, and that private companies have now secured a workable path to obtain adequate volumes. Shell’s 100,000 barrel purchase underscores that the arrangement can deliver fuel quickly when the terms are set and testing is agreed in advance.
Key Points
- Shell agreed to buy 100,000 barrels of gasoline from Pertamina to ease shortages at private stations.
- Indonesia capped private import quotas, then opened a channel for firms to import via Pertamina.
- BP bought 100,000 barrels in late October, and Vivo is taking similar shipments after earlier testing disputes.
- The government is supplying base gasoline, additive free, so private brands can do their own blending.
- Officials said Pertamina had about 7.52 million kilolitres of unused import quota available for this program.
- Private demand surged in 2025, with non subsidised sales up about 19 percent and private sales projected to rise around 91 percent.
- Some early cargoes were slowed by specification questions, including ethanol content and documentation.
- Pertamina reports 18 to 21 days of national gasoline cover, while private networks rebuild inventories in stages.
