Jakarta – A surge in LPG imports reaching 8.6 million tonnes per year has prompted the government to move quickly to accelerate the Dimethyl Ether (DME) production project as a substitute for LPG. Minister of Energy and Mineral Resources Bahlil Lahadalia, on Tuesday, 11 November, emphasised that this project is a national strategic priority to reduce dependence on imported energy and strengthen domestic energy independence.
According to Bahlil, Indonesia’s demand for LPG continues to increase every year, while domestic production capacity remains very limited. “Total LPG consumption next year will be around 10 million tonnes, while our production capacity is only 1.3–1.4 million tonnes per year. So the deficit will reach 8.6 million tonnes. Like it or not, we have to substitute imports. How? With DME,” he said.
Bahlil said that his party had reported the progress of the DME project to President Prabowo Subianto and the management of the Energy Endowment Fund. He revealed that the decision on the project location would be made in December. “We have had a meeting with the President and Mr Rosan. God willing, the decision will be made in December, and if all goes according to plan, construction of the DME can begin in January 2026,” he said.
This acceleration is considered important because gas demand in the industrial sector is also increasing rapidly, especially after the operation of the Lotte petrochemical plant, which requires a large LPG supply. Without alternative energy sources, Indonesia will become increasingly dependent on LPG imports, putting pressure on its foreign exchange reserves.
Efforts to realise DME production in Indonesia are not new. Previously, a DME development project involving PT Bukit Asam Tbk and PT Pertamina (Persero) was halted when foreign investor Air Products and Chemicals Inc. withdrew. Disagreement over the project’s economic value was the main cause of its failure.
However, the government did not give up. Bahlil ensured that the DME project would continue with funding support from Danantara as part of the national energy downstream programme. “The DME project is not just about business, but about the nation’s energy independence. We cannot continue to depend on imports,” he said.
The government aims to have DME replace LPG for household and industrial use while strengthening the national energy supply chain. Domestic DME production is also expected to drive a multiplier effect across sectors such as coal mining, infrastructure, and energy manufacturing.
“If the DME project goes ahead, industry will move, jobs will open up, and import pressure could be significantly reduced,” said Bahlil. (Hartatik)
Banner photo: Image generated by OpenAI’s DALL·E via ChatGPT (2024)
