Jakarta—The Indonesian government has reiterated the importance of reducing dependence on Liquefied Petroleum Gas (LPG) imports to improve the country’s trade balance. Minister of Energy and Mineral Resources (MEMR) Bahlil Lahadalia revealed the government’s ambitious plan to build a domestic LPG industry to reduce the deficit caused by the large volume of LPG imports.
“We plan to build a domestic LPG industry by using our C3 (propane) and C4 (butane) potential. This is an important step so that we are not too dependent on imports,” Bahlil said in a written statement on Thursday, September 12.
Indonesia spends around Rp450 trillion each year on oil and gas imports, including LPG. This huge figure pressures the country’s trade balance and foreign exchange. Bahlil emphasized that building a domestic LPG industry is the right solution to overcome this problem.
“If we can reduce LPG imports, the foreign exchange burden will automatically decrease, and it will positively impact our economy,” he added.
In addition to building the LPG industry, the government is accelerating the development of household gas networks as a more efficient alternative. This effort is carried out by building gas pipeline infrastructure from Aceh to Java Island.
“The purpose of this gas pipeline is to ensure the availability of energy for households and industries, especially when there is an oversupply of gas in an area. With this network, gas from Sumatra can be sent to Java or vice versa,” Bahlil explained.
The government also plans to simplify licensing regulations that are considered too complicated to encourage investment in the oil and gas sector.
“There are too many licenses in the oil and gas sector, reaching more than 300. We will cut this to facilitate the investment process,” Bahlil said.
In addition to cutting licensing, the government will offer various attractive incentives for investors.
“We are formulating measures to attract investment, including providing ‘sweetener’ or qualified incentives. We will also discuss with the Cooperation Contractors (K3S) to create a mutually beneficial agreement,” Bahlil concluded.
With these measures, the government hopes to strengthen the domestic energy industry while reducing dependence on LPG imports, which will ultimately nourish the trade balance and maintain national economic stability. (Hartatik)
