Industrial business players in Indonesia have asked for a more equitable and affordable Specified Natural Gas Price (HGBT) at the level of USD 7 per MMBTU, with the aim of increasing the competitiveness of the national industry. The government has previously set the HGBT at USD 6 per MMBTU since 2016 as an incentive for seven strategic industrial sectors, later rising to USD 7 per MMBTU.
Industry players asked the government to maintain the price at the level of US$ 7 per MMBTU because it is ideal, if there is still a price increase, the increase that can be tolerated at US$ 10 per MMBTU.
Chairman of the Natural Gas Users Industry Forum (FIPGB) Yustinus Gunawan said natural gas supply must always be available because gas is a source of raw materials and energy.
Gas is also a strategic industrial enabler used extensively in industries such as steel, cement, glass and textiles to power machinery and production processes.
"We as industry players only want gas supply and prices to be available, because that is the main need," he said at the Kadin Focus Group Discussion on "Natural Gas Sustainability for Industry" at the Kadin Tower, Jakarta (7/10/2025).
Gas Import for Industry
The Indonesian Chamber of Commerce and Industry (Kadin) urged the government to open opportunities for national industries to import natural gas. This step is considered important to overcome the lack of domestic gas supply, which currently only fulfills around 60% of industrial needs.
Vice Chairman of the Indonesian Chamber of Commerce and Industry Saleh Husin said that the government has set a Specific Natural Gas Price (HGBT) of US$ 7 per MMBTU for seven industrial sectors through Decree of the Minister of Energy and Mineral Resources Number 255K of 2024, but in reality the supply received by the industry is still far from the needs.
"Industry friends only get about 60% of the HGBT gas supply," Saleh said.
Natural gas is an important component in the production process of processing industries, such as fertilizer, steel, cement, pharmaceuticals, ceramics, textiles, and food and beverages. This supply shortage has the potential to reduce the competitiveness and production capacity of the domestic industry.
Kadin believes that gas imports can be a temporary solution until the national gas exploration project in 2026-2028 begins production. By opening access to imports, gas prices for industry can be more competitive, production capacity increased, and the competitiveness of Indonesian manufactured exports maintained.
"The government can consider imports in a limited period, while waiting for exploration results. Once domestic supply is sufficient, imports can be stopped," Saleh said.
Kadin also highlighted the imbalance between gas production and consumption areas. Excess supply is abundant in eastern Java, while demand is highest in western Java. This imbalance leads to distribution inefficiencies and high logistics costs.
In order for the gas import policy to be effective and not cause distortions, Kadin asked the government to prepare a legal umbrella in the form of a Government Regulation (PP) that guarantees the certainty of gas supply and distribution for industry.
"The industrial sector needs sustainable policy certainty. This PP must also open space for industries to import gas independently and build gas network infrastructure in industrial areas," Saleh explained.
Kadin also proposes that the Domestic Market Obligation (DMO) of natural gas be more in favor of the national manufacturing industry, so that industrial expansion and resilience can run optimally. Currently, industrial utilization is still in the range of 60-65%.
Deindustrialization Risk
Saleh warned that gas prices that are too high can make national industries lose competitiveness. If gas prices reach US$ 16.77 per MMBTU, many industry players risk closing operations or moving factories to neighboring countries that offer cheaper energy prices.
This, he continued, will trigger a surge in imports of finished products, threaten domestic industries, and reduce the contribution of the manufacturing sector to national economic growth.
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Benedictus Krisna Yogatama
The Ministry of Industry (Kemenperin) stated that the Specific Natural Gas Price (HGBT) policy has a significant impact on the growth of the national industry with an added value of up to IDR 496.5 trillion.
Secretary of the Directorate General of Chemical, Pharmaceutical and Textile Industries (IKFT) of the Ministry of Industry Sri Bimo Pratomo said the added value was based on an evaluation conducted by his party throughout 2020-2024.
The impact consists of an increase in exports of IDR 191.84 trillion, an increase in tax revenue of IDR 31.27 trillion, additional investment of up to IDR 272.4 trillion, and a decrease in fertilizer subsidies of IDR 950 billion.
The implementation of the policy still faces a number of obstacles. The gas quota received by the industry is often smaller than the stipulated allocation, mainly due to the imbalance between upstream supply and downstream demand.
"The Ministry of Industry emphasizes that the sustainability of the HGBT policy needs to be maintained by ensuring domestic gas supply and prices remain competitive so that the national industry can compete in the global market," he said.
Sufficient Domestic Supply
Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Laode Sulaiman, has received import proposals from entrepreneurs, but the government has not been able to grant the option.
"We respect input from industry friends. But at this time, it is indeed the government's policy to view energy security as much as possible we hold back imports at this time. But we will accommodate the input first," said Laode.
Laode said the gas supply crisis that occurred last month was due to pipeline problems, not gas supply bottlenecks. He ensured that the problem would not happen again.
The solution is to switch or swap the allocation of exported LNG for domestic needs, if at any time the distribution of natural gas through pipelines is problematic again.
PGN's Gas Supply Continues to Improve
PT Perusahaan Gas Negara Tbk (PGN) continues to strengthen its commitment in maintaining the reliability of national gas supply through infrastructure optimization and full support from the government and stakeholders.
Currently, gas pressure in the pipeline network has normalized and maintained stability. Along with the stabilization, customers in a number of previously affected areas of Western Java have resumed operations.
PGN Corporate Secretary Fajriyah Usman said that the entire PGN Board of Directors actively monitors operational developments in the Western Java region and parts of Sumatra in real-time through the digital-based Integrated Monitoring Center in Jakarta. This monitoring is part of PGN's efforts to ensure the smooth distribution of gas.
PGN also continues to consistently take strategic steps to ensure the reliability of energy distribution for customers.
"Alhamdulillah, we are grateful for the support given by the Ministry of Energy and Mineral Resources, SKK Migas, PT Pertamina (Persero), and all stakeholders," he said.
