According to WPB, Indonesia is moving from a long-discussed ambition to reduce imported bitumen toward a more structured domestic-substitution policy that could eventually alter one of Southeast Asia’s most important bitumen trade flows. On August 13, 2026, the government publicly advanced its Red and White Asphalt program, centered on expanded use of processed Buton asphalt, or Asbuton, in road construction and maintenance. The commercial significance is not simply that Indonesia wants to use more local material. The new A30 product combines 30% Buton bitumen with 70% petroleum asphalt refined domestically by Pertamina, compared with an average Buton share of only around 4% in earlier usage. The government’s longer-term direction is toward A100, which would rely fully on Buton-derived material.
The policy is backed by more than a political announcement. Public Works Regulation No. 10 of 2026, formally established on May 13, governs the use of processed Buton asphalt in road construction and preservation. It is accompanied by Public Works Ministerial Decree No. 6950/KPTS/Mn/2026, covering implementation for the 2026–2029 period. The ministry has also begun training, technical dissemination, laboratory preparation, procurement guidance, monitoring and quality-control work intended to support broader adoption. That matters because Indonesia has tried to increase Buton asphalt use before. The difference in 2026 is the combination of a defined blend, regulation, procurement mechanisms and a gradual implementation program.
For regional bitumen traders, the key question is therefore not whether Indonesia will stop importing bitumen immediately. It will not. The more important question is how much of the country’s existing import requirement can be displaced if A30 moves from policy into large-scale road procurement.
The size of the market explains why suppliers should pay attention. World Bank WITS data based on international trade statistics show that Indonesia imported about 970,461 metric tons of petroleum bitumen under HS 271320 in 2024, valued at approximately $452.95 million. Singapore supplied about 770,126 tons worth $366.03 million. In volume terms, that represented nearly 79% of Indonesia’s reported petroleum-bitumen imports, making Singapore by far the most exposed external supplier if domestic substitution succeeds.
The next-largest suppliers were much smaller. The UAE delivered about 77,417 tons in 2024, Malaysia about 29,737 tons, China about 22,515 tons, South Korea about 21,533 tons and Iraq about 24,614 tons. Thailand and Oman also supplied smaller volumes. The distribution makes the first commercial consequence unusually clear: this policy is not equally threatening to every exporter. Singapore has much more direct volume at risk than any other origin.
The government itself has framed the policy in explicit import-substitution terms. Earlier in 2026, the Public Works Ministry said imports supplied roughly 78% of Indonesia’s asphalt requirement, based on total national demand of around 1.056 million tons in 2024. It projected national demand could eventually increase toward 1.5 million tons annually and said wider use of A30 could reduce dependence on imported asphalt by around 50%. The ministry has also estimated that the program could save approximately Rp4.08 trillion, or more than $220 million, in foreign exchange each year. Those numbers are policy projections rather than realized savings, but they show the scale the government is targeting.
A30 is important because it changes the mathematics of localization. Using a small quantity of natural asphalt as an additive has limited impact on national petroleum-bitumen imports. Moving the Buton component toward 30% creates a much larger potential displacement effect while still retaining a substantial petroleum-asphalt component supplied domestically through Pertamina. If the blend becomes standard across a meaningful share of national and toll-road work, the import requirement for conventional petroleum bitumen could decline even if Indonesia’s total road-binder consumption continues to grow.
That distinction is important. Indonesia does not need overall bitumen demand to fall in order for imports to decline. Road construction can remain strong, total binder consumption can expand, and imported material can still lose market share if the incremental demand is increasingly fulfilled by A30 and other domestic products.
For Pertamina, the strategy potentially creates a different commercial position. The company is not being removed from the binder supply chain by the growth of Buton asphalt. Under A30, its petroleum asphalt forms 70% of the blend. In other words, Indonesia’s localization policy combines a mineral-derived domestic resource with domestically refined petroleum material. That could strengthen domestic blending and processing while reducing reliance on finished imported petroleum bitumen.
For Singapore, the consequences could be more substantial. Indonesia has historically been an exceptionally important destination for Singapore petroleum bitumen. In 2024, Indonesia was also the largest reported foreign buyer of Singapore petroleum bitumen by volume. If several hundred thousand tons of Indonesian demand are eventually substituted, Singapore suppliers may have to redirect more barrels into other Asian markets.
That would not necessarily mean lower Singapore production. It could instead change regional competition. Barrels previously moving on short-haul voyages into Indonesia might seek buyers in Vietnam, Thailand, China, Australia or other destinations. More available Singapore supply competing for those markets could influence regional differentials, cargo allocation and freight economics. The effect would depend on refinery output, seasonal paving demand and supply conditions elsewhere in Asia, but the direction is commercially significant: Indonesian import substitution could export competitive pressure into neighboring markets.
Malaysia faces a different risk. Its direct petroleum-bitumen sales to Indonesia were far smaller than Singapore’s in 2024, so Malaysia should not be presented as equally exposed. However, Malaysian suppliers could face indirect pressure if displaced Singapore barrels begin competing more aggressively across Southeast Asia. A policy implemented in Jakarta could therefore affect pricing behavior in markets that never bought significant quantities of Indonesian-bound material themselves.
The UAE and other Gulf exporters could also lose some optionality. Indonesia has been an attractive large Asian import market capable of absorbing spot and term volumes from several origins. A structural reduction in that import requirement would narrow the pool of destinations available to exporters when other Asian markets weaken. That matters particularly during periods when India is seasonal, China changes refinery output, or Southeast Asian road demand is uneven.
However, there is a major reason traders should not price a collapse in Indonesian imports too quickly: A30 is a policy and industrial scaling story, not yet proof of nationwide substitution.
Indonesia has possessed enormous Buton asphalt resources for decades, yet utilization has historically remained low. A 2023 technical-economic study estimated Buton asphalt resources at around 792.5 million tons and reserves at roughly 182.65 million tons. At that time, 16 processing plants had nominal combined capacity of approximately 2.03 million tons per year, but actual production was reported at only about 43,128 tons, implying extremely low utilization of installed capacity. Those figures are historical rather than a measure of current 2026 output, but they illustrate why resource abundance alone has never guaranteed large-scale market penetration.
A later peer-reviewed analysis also concluded that successful import substitution would require more than geological availability. It identified the need for competitive quality, sufficient processing capacity, supporting transportation infrastructure and a coordinated substitution policy. The research projected that domestic substitution could theoretically expand dramatically over time, but it also recognized that further industrial capacity would eventually be required as demand increased.
The commercial bottleneck is therefore likely to shift from “Does Indonesia have Buton asphalt?” to “Can Indonesia consistently process, test, transport and deliver enough specification-compliant material at competitive cost?”
Buton Island is located in Southeast Sulawesi, while a large share of road demand is spread across Java, Sumatra, Kalimantan and other parts of the archipelago. Domestic origin does not eliminate logistics. Material still has to be processed, moved between islands, stored, blended, quality-controlled and delivered to asphalt plants and road projects. If those costs rise too far, imported petroleum bitumen delivered efficiently from Singapore or other nearby origins can remain commercially competitive.
Technical consistency will matter as much as price. Road authorities, toll-road operators and contractors cannot simply replace a familiar petroleum binder with a new blend because the government wants lower imports. Performance specifications, mixture design, laboratory testing, plant compatibility, construction procedures and long-term pavement behavior must remain acceptable. The ministry’s current emphasis on training and laboratory readiness shows that the government itself recognizes the implementation challenge.
The government has also stated that greater Buton asphalt use should not increase road-construction costs. That requirement may become one of the most important tests of the program. Import substitution that produces a technically acceptable binder but raises the delivered cost to contractors would be difficult to sustain without mandates or subsidies. The stronger commercial model is one in which A30 can compete simultaneously on national policy, supply security, quality and price.
This is why the projected annual foreign-exchange saving of more than $220 million should be treated as an objective, not as money already saved. Actual savings will depend on the tonnage substituted, the cost of domestic Buton processing, Pertamina’s petroleum-asphalt component, inter-island transportation, imported bitumen prices and exchange rates.
There is also an important distinction between A30 and A100. A30 already keeps 70% petroleum asphalt in the product, although that component is intended to come from domestic refining. A100 represents a much more ambitious transition toward full reliance on Buton-derived material. Public statements identify A100 as a longer-term direction, but they do not yet establish that Indonesia can rapidly convert its entire road network to A100 at commercial scale. The market should therefore avoid treating the long-term technological ambition as an immediate disappearance of imported bitumen.
For traders, the most useful signals over the next stages will be physical rather than political. They should watch how many road packages actually specify processed Buton asphalt, how much A30 is purchased through public procurement, whether toll-road operators adopt it consistently, how Asbuton production volumes respond, and whether Indonesia’s monthly petroleum-bitumen imports begin declining even during strong road-construction periods.
If those indicators move together, the market will have evidence that import substitution is becoming structural rather than promotional.
The impact could then extend beyond Indonesia. Singapore could lose a major destination and redirect supply. Malaysian, Chinese, Korean and Gulf suppliers could face a smaller Indonesian import pool. Competing import markets could gain access to additional cargoes. Freight patterns for short-haul Southeast Asian bitumen movements could change, and regional price spreads could adjust as suppliers compete for alternative outlets.
For Indonesian buyers, however, the calculation may be different. The policy offers potential protection from external supply disruptions, crude-linked volatility, foreign-exchange exposure and international freight shocks. A country that can satisfy a larger share of its road-binder demand from a combination of domestic natural asphalt and locally refined petroleum material becomes less exposed to sudden changes in external availability.
That supply-security value may be particularly important in 2026, when shipping, energy markets and major trade routes have repeatedly demonstrated how quickly delivered costs can separate from normal historical relationships.
The biggest threat to foreign suppliers, therefore, is not that Indonesia will suddenly ban imported bitumen. It is that imported bitumen could gradually become the balancing barrel rather than the foundation of Indonesian supply.
If A30 scales successfully, imports may increasingly be used only when domestic output is insufficient, when certain technical grades cannot be produced locally, or when imported material becomes unusually competitive. That would fundamentally change the negotiating position of both Indonesian buyers and regional exporters.
For decades, the commercial assumption has been that Indonesia’s domestic resources could not prevent large-scale reliance on imported petroleum bitumen. The Red and White Asphalt program is an attempt to break that assumption.
Whether it succeeds will depend on industrial execution rather than slogans. But if Indonesia can move Buton asphalt from a roughly 4% historical role toward a 30% component in widely deployed road binders, the impact will not stop at Indonesian road projects.
It could remove a meaningful portion of demand from one of Asia’s largest import markets, force Singapore to find new destinations for significant volumes, intensify competition across Southeast Asia and gradually redraw regional bitumen trade flows.
For suppliers, the question is no longer whether Indonesia possesses enough Buton asphalt. It is whether Indonesia has finally created a system capable of turning that resource into import displacement.
If the answer becomes yes, Southeast Asia may be looking at one of its most important structural bitumen-market changes in years.
By WPB
News, Bitumen, Indonesia, Buton Asphalt, Asbuton, A30, Pertamina, Singapore Bitumen, Import Substitution, Southeast Asia
