Indonesia’s state-owned oil giant, PT Pertamina (Persero), is at the centre of an ongoing corruption investigation led by the Attorney General’s Office (AGO). The case involves the mismanagement of crude oil imports and exports, alleged fuel adulteration, and collusion between Pertamina executives and private contractors. 

Tempo.co reported that the case initially came to light after public complaints about poor-quality Pertamina fuel, specifically RON 92 (Pertamax). The first reports emerged from Papua and Palembang in the estreme east and west of the country, where consumers noticed inconsistencies in the fuel’s performance. These concerns triggered an investigation by the AGO, which ultimately uncovered large-scale fuel adulteration and suspected corruption within Pertamina Patra Niaga and its subsidiaries.

Corruption in oil procurement

Investigators then found violations of Ministry of Energy and Mineral Resources (ESDM) Regulation No. 18/2021, which prioritises domestic crude oil supply for national needs. Said regulations require Pertamina to absorb locally produced crude oil before considering imports and allowing domestic oil contractors (KKKS) to export for profit. However, senior Pertamina executives reportedly manipulated the process, ignoring the regulations to benefit external parties, causing massive financial losses to the state. 

Three high-ranking directors in Pertamina have been identified in rigging downstream optimisation meetings, and rejecting crude from domestic contractors. They claimed local crude was too expensive and did not meet refinery specifications. This refusal allowed KKKS to export their oil for higher profits rather than supplying it to the state.

With domestic crude rejected, Pertamina was then forced to import crude oil at a higher cost, significantly increasing national energy expenses. As a result, the country faces a significantly higher base oil price that inflated market index prices. Fuel subsidies were also inflated, adding to the government’s budget. 

Public anger

Furthermore, investigators also found manipulation in fuel procurement by Pertamina executives. Riva Siahaan, the Director of Pertamina Patra Niaga, is said to have bought lower-octane fuel (RON 90) but he then sold it as higher-octane RON 92, generating illegal profits. This essentially scammed the public. 

The AGO estimates the state lost IDR193.7 trillion ($12.3bn) in 2023 alone due to this scheme. However, since the corruption allegedly dates back to 2018, total losses could be significantly higher. Kompas.com detailed the alleged use of funds as follows:

• Illegal domestic crude oil exports – IDR35 trillion ($2.2bn)

• Broker-inflated crude oil imports – IDR2.7 trillion ($170mn)

• Compensation payouts – IDR126 trillion ($8bn)

• Subsidy fraud – IDR21 trillion ($1.3bn)

Zeroing in

In time, the names of Pertamina executives emerged as suspects behind the scheme. Tempo.co released the names and the claims against them:

• Riva Siahaan (CEO, Pertamina Patra Niaga), orchestrated downstream meeting manipulations and fuel adulteration.

• Sani Dinar Saifuddin (Director, Kilang Pertamina Internasional), illegally awarded contracts to oil brokers.

• Agus Purwono (VP, Feedstock Management, Kilang Pertamina Internasional), coordinated inflated pricing with oil contractors.

• Yoki Firnandi (Director, Pertamina International Shipping), arranged overpriced oil imports, causing 13–15% markups in state spending.

• Maya Kusmaya (Marketing Director, Pertamina Patra Niaga), authorised blending of lower-grade fuel for fraudulent sales.

• Edward Corne (VP, Trading Operations, Pertamina Patra Niaga), directly involved in fuel adulteration.

Meanwhile, some private sector executives are also believed to be complicit. They are: 

• Muhammad Kerry Adrianto Riza (PT Navigator Khatulistiwa), benefited from inflated shipping contract prices.

• Dimas Werhaspati (PT Navigator Khatulistiwa, PT Jenggala Maritim), helped coordinate import pricing manipulations.

• Gading Ramadan Joede (PT Jenggala Maritim, PT Orbit Terminal Merak), facilitated high-priced oil imports through Pertamina connections.

Unfolding case

The investigation is ongoing, with authorities conducting raids at Pertamina’s Fuel Terminal in Cilegon, Banten. More arrests and asset seizures may follow as prosecutors uncover further evidence. 

As witnesses are being probed, authorities continue to seize documents, electronic devices, and conduct raids at key locations, including fuel terminals and the business premises of those involved. Although no court hearings have yet been scheduled, the AGO is preparing legal proceedings against the suspects. Investigators continue to track financial flows and additional individuals who may have benefitted from the scheme.

In another twist, Riza Chalid, a well-known figure in Indonesia’s oil industry, who is the father of Kerry Adrianto Riza, one of the nine individuals charged in the scandal is also being probed. Kerry is known to be the owner of PT Navigator Khatulistiwa and the owner of PT Orbit Terminal Merak (OTM), both implicated in fraudulent crude oil trading.

Authorities suspect that funds linked to the illegal fuel trade may have been funnelled to Riza Chalid, prompting the AGO to request the Indonesian Financial Transaction Reports and Analysis Center’s (PPATK) assistance in analysing the financial transactions of all nine suspects. While PPATK chief Ivan Yustiavandana confirmed receiving the AGO’s request, he declined to specify whether it explicitly involved tracking money flows to Riza Chalid.

Riza Chalid has long been a powerful player in Indonesia’s oil industry, often referred to as “the gasoline godfather”, Tempo.co reported. His connections stretch across the energy sector, politics, and law enforcement, making him seemingly untouchable despite past corruption allegations. He is infamous for the “Papa Minta Saham” (Dad asks for stocks) scandal: While Riza was never formally investigated, his name surfaced in high-level corporate bribery allegations involving Indonesian energy interests.

Despite mounting evidence, authorities never pursued legal action against him, allegedly due to his close ties with political elites, intelligence officers, and state auditors.

Indonesia’s Attorney General ST Burhanuddin has signalled the possibility of severe punishments, including the death penalty.“If there are aggravating factors, particularly during the COVID-19 period, then the penalty could be more severe—even the death penalty,” Burhanuddin stated on March 6.

Tempo.co also revealed that the possibility of capital punishment in a corruption case is rare in Indonesia but not unprecedented, particularly when state losses reach staggering levels. The financial impact and the exploitation of a national crisis could make this case a litmus test for President Prabowo Subianto’s commitment to eradicating corruption in the energy sector.

However, analysts warn that the case could also reflect a broader power shift in Indonesia’s oil industry, with old players being pushed out to make way for new business elites. Whether this case results in meaningful reform or just another high-profile political reshuffling remains to be seen.

This corruption scandal underscores systemic issues in Indonesia’s energy sector, where corporate malpractice has inflated costs for both the government and consumers. The ongoing legal battle will determine whether those responsible face significant consequences and whether reforms will be implemented to prevent future misconduct.