Jakarta. Indonesia should stop routing its natural resource exports through third countries before they reach their final destinations, Energy and Mineral Resources Minister Bahlil Lahadalia has said, accusing intermediary countries of benefiting from Indonesian commodities without contributing to their production.
Bahlil said the practice had been going on for years and instructed his director generals to ensure Indonesian commodities were no longer routed through intermediary countries unnecessarily.
“Ship them directly. Our goods have been handled this way for a long time. I cannot let them continue processing and handling our commodities like this. I have already instructed my director generals,” he said.
In international trade, transit countries can serve as logistics and trading hubs, where commodities are stored, processed, consolidated, or re-exported before reaching their final destinations. However, routing goods through such countries can complicate the identification of their original country of origin and the recording of export values.
He argued that intermediary countries benefited from the arrangements through tax revenue and improvements to their trade balances, while Indonesia lost out on the economic benefits of its own exports.
“Why should we use another country? They collect the taxes and benefit from the trade balance. Even when there is just a little trouble, they become so alarmed. Stop sending goods there. Indonesia is a sovereign country and should not be dictated to,” Bahlil said.
“I already know journalists will ask me which country it is. You also know which country it is. You can follow your own instincts. That country should not just want things when they are convenient for it,” he said.
Bahlil’s remarks come as Indonesia-Singapore relations face renewed friction over issues ranging from natural gas supplies and cross-border haze to airspace management and extradition agreements.
The latest tensions are testing ties between the neighboring countries as they approach 60 years of diplomatic relations in 2027.
The strain contrasts with the optimism surrounding Singaporean Prime Minister Lawrence Wong’s visit to Indonesia shortly after President Prabowo Subianto took office in 2024. Wong was the first foreign leader to make an official visit under Prabowo, who had pledged to pursue a good-neighbor policy.
Over the past two weeks, however, Indonesia has reduced natural gas exports to Singapore, raised uncertainty over planned electricity exports, and urged Indonesian Muslims traveling for the Umrah pilgrimage to avoid transiting through Singapore’s Changi Airport.
Prabowo himself has raised allegations involving Singapore, including claims that Indonesian commodity exports were undervalued through Singapore before being resold to third countries at higher prices. He has also accused companies backed by investors from neighboring countries of involvement in forest and land fires.
The natural gas trade has become another point of contention. Speaking after a meeting with Prabowo in Jakarta on Thursday, Bahlil said Indonesia had shipped 148 liquefied natural gas (LNG) cargoes to Singapore, although he did not specify the period covered by the shipments.
He suggested that some of the cargoes were subsequently resold to other countries, while the remainder went toward meeting Singapore’s domestic demand. Bahlil did not provide evidence identifying specific shipments that had been re-exported.
Singapore’s Ministry of Energy and Trade and Industry (METI) pushed back against the suggestion, clarifying on Friday that LNG traded by Singapore-based companies generally moves directly from its source country to its final destination without physically passing through Singapore.
The ministry said Singapore was an international LNG trading hub, with more than 50 companies based in the city-state buying, marketing, and trading supplies from global markets, including the United States, Australia, and Malaysia.
“While Singapore-based traders make the commercial decisions relating to the cargo, the actual LNG cargo usually moves from source to destination country directly and does not physically pass through Singapore,” METI told Channel NewsAsia.
The ministry also stressed that natural gas imported through pipelines from Indonesia was intended for Singapore’s domestic consumption, not re-export.
Singapore has long served as a regional trading and energy hub, with commodities and energy products moving through its trading networks to markets across Asia.
Singaporean Foreign Minister Vivian Balakrishnan visited Jakarta earlier this week in an apparent effort to contain the tensions, meeting Indonesian Foreign Minister Arrmanatha Nasir and Prabowo.
“It’s important for cool heads to prevail, for direct, honest, candid, constructive conversations to be had, and for us to look for a collective approach,” Balakrishnan said.
