Energy Minister Restricts Gas Exports to Safeguard Indonesia's Supply

3 weeks ago 5

TEMPO.CO, Jakarta - Indonesian Minister of Energy and Mineral Resources Bahlil Lahadalia claimed that the supply of industrial gas, which was previously reported to have decreased, has now returned to normal. He mentioned that one of the steps taken was to reduce the allocation of gas for export and redirect it for domestic needs.

"So, we are not doing some of the export. Also, there is a new supply of gas," said Bahlil when met at his office in Central Jakarta on Friday, August 22, 2025.

Bahlil stated that the recent decrease in gas supply was triggered by a fire at a facility owned by Pertamina EP in Subang, West Java. "After the pipeline fire, we can now allocate it," said Bahlil.

Previously, PT Perusahaan Gas Negara (PGN) announced the restriction of gas supply to industrial players. The reduction in gas supply occurred due to the imbalance between supply and demand in August 2025.

PGN Corporate Secretary Fajriyah Usman stated that this issue was also caused by the decrease in gas distribution from the contractor of the working contract cooperation (KKKS). PGN then limited the gas supply for a temporary period to some customers in the regions of West Java and Sumatra.

She mentioned that this occurred due to operational disruptions from KKKS. "And there are some additional gas supplies that are still in the finalization process," said Fajriyah when contacted on Thursday, August 14, 2025.

On Sunday, August 17, PGN claimed that the gas pressure in the pipeline infrastructure had gradually stabilized due to the additional supply. Fajriyah Usman stated that this step was the result of synergy between PGN, the Ministry of Energy, SKK Migas, Pertamina, and other stakeholders. The additional supply is expected to improve operational reliability and ensure uninterrupted service for customers.

"We are committed to supporting the smooth operation of customers, especially in the industrial sector that has a broad impact on the national economy," she said in a written statement on Monday, August 18, 2025.

Prior to this, the Ministry of Industry reported that several industrial sectors were showing decreased utilization due to gas supply constraints. One of them is the national ceramic industry.

Ministry of Industry Spokesperson Febri Hendri revealed that throughout the first semester of 2025, the utilization rate of the ceramic industry only reached 70-71 percent. Nevertheless, Febri stated that the figure had improved compared to the previous year. "If the gas supply continues to be disrupted, this achievement could be eroded, especially for the fertilizer industry that will supply the food self-sufficiency program of President Prabowo," said Febri on Thursday, August 14, 2025.

Febri warned that the national industrial gas demand reached 2,700 MMSCFD, while the volume of Certain Natural Gas Price (HGBT) available is only around 1,600 MMSCFD, with 900 MMSCFD of it allocated to State-Owned Enterprises. This condition is considered detrimental to private companies and may impact business efficiency, potentially leading to layoffs.

The Ministry of Industry also highlighted PT PGN, which applies HGBT worth US$16.77 per million British thermal unit (MMBTU). According to Febri, the price burdens business actors. He believes that the HGBT value should not be above US$6.5 per MMBTU.

He mentioned that around 134,795 workers in various industrial sectors rely on the availability of HGBT. The details are 43,058 workers in the ceramic industry, 31,434 in the steel sector, 23,006 in petrochemicals, 12,928 in glass, 12,288 in oleochemicals, 10,420 in fertilizers, and 1,660 in the rubber glove industry.

According to Febri, the increase in HGBT will directly erode profit margins and decrease factory utilization. Even in the long term, Febri predicts that this will reduce investor interest in the manufacturing sector, particularly in energy-intensive industries. "If the HGBT issue is not immediately addressed, the impact will not only be on industrial competitiveness but also the welfare of the people who depend on this sector," he said.