JAKARTA – The Ministry of Energy and Mineral Resources (ESDM) has called on investors to establish liquefied petroleum gas (LPG) plants to reduce Indonesia’s reliance on imports. This was conveyed by Bahlil Lahadalia, Minister of Energy and Mineral Resources, during the Mandiri Investor Forum on Wednesday (12/2).

He noted that Indonesia spends IDR 500 trillion annually on fossil fuel imports, including LPG. Domestic LPG consumption stands at 8.7 million metric tonnes per year, while local production can only meet around 1.4 million metric tonnes. This results in a shortfall of 7 million metric tonnes of LPG, which is imported from the United States and the Middle East.

“For the 3 kg LPG subsidy, we need 8.2 million metric tonnes annually. Our domestic industry’s capacity is no more than 1.4 million metric tonnes. So, on average, we import around 7 million metric tonnes each year, including for industrial use,” he said.

In response, Bahlil invited investors to invest in the construction of LPG plants within Indonesia.

The Ministry of Energy and Mineral Resources and the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) are reportedly drafting an investment plan for the construction of LPG plants with a production capacity of 1.5-2 million metric tonnes, starting from January 2025. This includes selecting investors and setting the project timeline.

Furthermore, the government is accelerating the development of gas networks (jargas) as an alternative to LPG. This programme will be prioritised in Java, with expansion efforts already underway in Sumatra. The funding source for this initiative is proposed to come from Non-Tax State Revenue (PNBP).

“In order to boost energy sovereignty, we will use PNBP funds for the project because if we rely on the private sector, I’m unsure if we can complete it within our current government term,” he added. (EF/LK/ZH)