Pertamina's corruption probe in Indonesia fuels anger over ‘oil and gas mafia'
A US$12 billion
corruption scandal at Indonesian state-owned
energy giant Pertamina has triggered widespread outrage that threatens to dent public trust in President Prabowo Subianto's administration.
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The case was a test to see if Prabowo could fulfil his election campaign promise to end the country's 'oil and gas mafia', which had been backed by enforcement officers and political elites for decades, said Fahmy Radhi, an energy economist at the University of Gadjah Mada (UGM) in Yogyakarta.
'The power of the oil mafia is extraordinary. They conspire with elite decision-makers at Pertamina and they collude with private companies, traders or brokers. Often they also cooperate with ministries, state agencies, or even with lawmakers,' said Fahmy, who was a member of the anti-oil mafia task force established in 2014 during former president Joko Widodo's first term.
Last week, the Attorney General's Office arrested nine suspects for allegedly 'colluding' to defraud Pertamina over petroleum imports from 2018 to 2023. They include six who were executives at several Pertamina subsidiaries and three who were executives at a business group affiliated with Riza Chalid – a notorious oil importer dubbed the 'oil king' by the media – including his son.
According to the AGO, the suspects allegedly claimed the quality of domestically produced crude oil did not meet local refinery specifications, paving the way for its export by oil contractors, including suspect Muhammad Kerry Adrianto Riza, Chalid's son.
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Chalid's house was raided by enforcement officers as it was allegedly used as an operational base by three of the suspects' companies, but he was not named as a suspect.
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