Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, said the government has planned to build a liquefied petroleum gas (LPG) production plant in Indonesia, as an effort to meet the supply for LPG consumption which is dominated by imports.
“I invite all investors who want to build an LPG factory, directly contract with Pertamina,” Bahlil said on Tuesday, February 11, 2025.
He expressed hope that investors can help build the Indonesian domestic LPG industry, while suggesting that investment in Indonesia is very promising.
“Captive marketing, the payment is directly from Bank Mandiri. This is direct. This is very captive,” he said.
Currently, Indonesia’s LPG consumption reaches 8.7 million metric tons (Mt) per year. However, Indonesia’s domestic production only reaches 1.4 million Mt in a year. In order to meet domestic needs, Indonesia must import more than 7 million Mt of LPG.
From the consumption of 8.2 million Mt (94 percent) is allocated for subsidized 3 kilogram (kg) LPG. According to the Ministry of Finance, throughout 2024 the government has disbursed a subsidy of Rp80.2 trillion (US$ 5.2 million) for subsidized 3 kg LPG. Indonesia imports more than 50 percent of LPG need from America, the rest from the Middle East.
“Of the 8 million Mt consumption, more than 50 percent we import from America, the rest from the Middle East,” Bahlil said.
LPG imports were earlier conveyed by Bahlil, who revealed that the amount of LPG imports continued to increase from 58.82 percent in 2013 to 79.8 percent in 2023.
“Can’t we build that industry, or is it deliberately left for importers to continue playing?” Bahlil said on August 27, 2024.
