Indonesia Reportedly Mulls Buying Russian Oil as Protests Erupt Over Inflation

Thousands of Indonesian citizens hit the streets to protest against a 30 percent hike in subsidized oil prices introduced by the Joko Widodo government - the first in 8 years. Students and labor unions are planning to stage more protests across the country, seeking a relief from rising inflation.

Indonesia might become another Asian buyer of Russian oil as President Joko Widodo is considering options to import Russian crude in order to keep domestic inflation under control, the Financial Times reported on Monday.

“We always monitor all of the options. If there is the country [and] they give a better price, of course,” Widodo said in an interview with the newspaper when asked if his government would purchase Russian oil.

Widodo, popularly known as Jokowi, said it is the government’s “duty” to find various sources to meet the energy needs of the nation's 270 million people.

The Indonesia government has been facing pressure for weeks as local lawmakers have called for importing oil from Russia, which, according to Indonesia's tourism minister, offered a 30 percent discount on the international price.

In August, Indonesian Ambassador to Russia Jose Tavares told Sputnik that his government is not supporting initiatives that are not in line with "national interests."

Indonesia’s firm PT Kilang Pertamina Internasional said last month that it was “evaluating the risks” of Western sanctions and “its mitigations” of importing Russian oil.

Widodo justified his move to raise fuel prices by saying that it was his “last option” to keep the fiscal math of the economy under control. The Jokowi government had assumed the Indonesian crude basket would cost around $63 per barrel in 2022.

However, Indonesian Finance Minister Mulyani Indrawati said the rise in crude prices in the international market requires an additional approx. $13.2 billion in public spending on energy subsidies, pushing the oil subsidy cost to $47.0 billion.

Indonesia imports 60 percent of its total fuel requirements, translating into 1.6 million barrels of oil daily.