The manufacturing sector is sounding the alarm over natural gas supply shortages and restrictive pricing policies that threaten production, exports, and jobs. Industry leaders warn that the government’s special gas price policy (HGBT), combined with supply disruptions, has become a burden rather than a solution.

The food and beverage (F&B) industry is among the hardest hit. According to Adhi Lukman, Chairman of the Indonesian Food and Beverage Entrepreneurs Association (GAPMMI), several factories have been forced to furlough employees due to HGBT quota restrictions.

“This will have a very significant impact. Some of our members have already calculated losses in case of production stoppages, including production losses, export losses, and so on,” Adhi told SUAR in Jakarta on Monday (August 18).

The issue faced by entrepreneurs is not only the quota restriction policy for certain strategic sectors. PT Perusahaan Gas Negara (PGN), in a written notice, announced a maximum gas usage regulation for industries from August 13–31, 2025, limited to 48% due to force majeure.

The limited gas supply occurred due to a decrease in volume delivered by gas suppliers or upstream oil and gas cooperation contract contractors (KKKS) in August 2025.

In addition to production stoppage losses, Adhi noted that the industry also suffers from surcharges, ranging from US$11-15 depending on usage.

Following this supply limitation, Adhi has received reports from several F&B companies unable to fulfill export orders due to gas restrictions.
“Now they have to halt production, reduce workforce, and cut production capacity, which has a wide-ranging impact,” he said.

The F&B industry is a major consumer of HGBT, contributing 41.15% to non-oil and gas Gross Domestic Product (GDP), equivalent to 7.2% of national GDP in the first quarter of 2025.

However, the government has now stipulated that this crucial sector is excluded from HGBT recipients and must purchase gas at market prices. This has impacted production activities amid the HGBT quota restrictions.

Besides the F&B industry, the ceramic industry has also felt a major impact from the HGBT limitation policy, with hundreds of workers being furloughed.
“Recently, two tableware industries in Tangerang had to furlough around 700 employees due to HGBT usage quota limits, and when factoring in LNG regasification surcharges, gas prices are high,” said Edy Suyanto, Chairman of the Indonesian Ceramic Industry Association (Asaki), as quoted by CNBC Indonesia.

Asaki strongly regrets the prolonged gas supply disruption without any solution or improvement, which has already caused casualties.
“The government needs to find an immediate solution regarding gas supply disruptions so that more industries do not have to furlough employees. We are concerned that it could worsen, potentially leading to even more layoffs,” said Edy.

Opening an Industrial Crisis Center

Industry players under pressure are now anxiously awaiting follow-up actions from the government through the Ministry of Industry, which has responded proactively by establishing the HGBT User Industrial Crisis Center.

Ministry of Industry spokesperson, Febri Hendri Antoni Arief, explained that the establishment of this crisis center follows an increasing number of reports from domestic industry players regarding supply restrictions, reduced gas pressure received, and high gas prices charged.

“There are no technical production or gas supply issues from the upstream gas industry. We do not want a repeat of past incidents in domestic industries caused by import relaxation policies that led to reduced production utilization, industry closures, and workforce reductions in the textile and textile products (TPT) and footwear sectors,” Febri said in a press release received by SUAR on Tuesday (August 19).

Regarding the supply disruption, Fajriyah Usman, Corporate Secretary of PT Perusahaan Gas Negara (PGN), stated that the company fully understands the complaints from industry players about the sudden restrictions.

As one of the natural gas distributors, PGN is committed to providing stable and affordable energy in accordance with government regulations.

“Gas for the seven industrial sectors receiving HGBT comes from specific upstream fields in Sumatra and Java designated by the government, both in terms of volume and source. According to the Minister of Energy and Mineral Resources’ decree, the amount of gas received by HGBT customers depends on upstream supply availability. If supply is sufficient, customers receive the full allocation. However, if production drops due to maintenance or shutdown, the volume may decrease,” Fajriyah explained in a written statement to SUAR on Monday (August 18).

The seven manufacturing sectors receiving HGBT, as outlined by the Minister of Energy and Mineral Resources’ decree, include fertilizers, petrochemicals, oleochemicals, steel, ceramics, glass, and rubber gloves.

Outside of these seven sectors, manufacturing industry players must secure gas supply according to market mechanisms, which comes at higher and more volatile prices, as it is tied to global oil prices and involves a longer and more complex distribution chain, especially when supplied in the form of LNG.

Not Yet Successful

Adhi explained that the designation of the seven sectors receiving HGBT was the result of efforts by industry players and the Ministry of Industry, which was not easy to push for approval from the Ministry of Energy and Mineral Resources. “However, the Ministry of Industry’s effort to provide HGBT to all sectors has not yet succeeded,” Adhi told SUAR on Monday (August 18).

According to Adhi, several F&B industry players have received invitations from PGN to hold discussions and find the best solution.
“I leave this [resolution] to PGN. Hopefully, we as the association will be invited to a dialogue to find the best solution, because in principle, we also want to support national industrial growth,” Adhi concluded.

Although PGN has provided various clarifications, Yustinus Gunawan, Chairman of the Natural Gas Users Industry Forum (FIPGB), expressed regret over PGN’s immediate response stating that upstream natural gas supply is beyond PGN’s control and leaving the supply issue for several non-HGBT receiving industries to market mechanisms.
“With the very detailed calculations as listed in the ministerial decree, upstream producers must have calculated very carefully, including for maintenance and technical issues during production. If PGN says the problem is upstream, is there transparency in the data or not? Which upstream facilities?” Yustinus said when contacted by SUAR on Tuesday (August 19).

He added that FIPGB and the Ministry of Industry have requested transparency on upstream gas production since 2022 and 2023. However, distributors repeatedly claim that production data is confidential.

Furthermore, Yustinus doubts PGN’s intention to genuinely engage in dialogue with industry players.
“I am skeptical that PGN wants to engage in dialogue to find solutions. They always buy time citing technical reasons, pipeline fires, or force majeure. Their letters to users are disclaimers, not accountability. Even if they claim to only distribute, transparency downstream is needed,” he said.

He warned that the nation’s natural gas resources should not make it harder for domestic manufacturing industries. “We shouldn’t end up like dead rats in a granary,” Yustinus concluded.

Mohammad Faisal, Executive Director of the Center of Reform on Economics (CORE) Indonesia, reflected on the timing of the gas supply restriction for industry as a lesson for the government to learn from the manufacturing industry crisis.
“The key task is that restrictions must be accompanied by monitoring mechanisms and anticipation of bottlenecks. If the goal of the restriction is to ensure HGBT allocation is on target, it must not result in industries in need failing to receive supply as they should, worsening the existing problem,” Faisal said in a brief statement to SUAR on Tuesday (August 19).

Authors: Christian Wibisana & Tria Dianti