Ceramic Industry in Distress as Gas Supply Restricted by 80 Per Cent
Industrial players using natural gas are highlighting issues regarding the supply of the Specific Natural Gas Price (HGBT) in West Java. The supply, which is deemed not to align with government allocations, along with restrictions on gas usage, has the potential to suppress industrial utilisation and national competitiveness.
The General Chairman of the Forum of Natural Gas Using Industries (FIPGB) and the Chairman of the Sheet Glass and Safety Association (AKLP), Yustinus, stated that the realisation of HGBT gas supply in West Java has currently only reached approximately 88-90 per cent of the allocation set in ESDM Ministerial Decree Number 281.K/2026.
The problem is not limited to volume. Industries must also pay higher prices for gas requirements exceeding the realised supply. In August, only 40 per cent was charged at US$13 per MMBTU, while 60 per cent was charged at US$15.6 per MMBTU.
Entering September 2026, issues have resurfaced after PGN sent a letter to customers in West Java regarding the restriction of HGBT supply to 80 per cent of the minimum contract volume in the Gas Sales and Purchase Agreement (PJBG).
Yustinus believes this policy could potentially suppress industrial utilisation, as natural gas is a primary energy source that is difficult to replace in several manufacturing sectors. Consequently, industrial utilisation is being constrained to just 80 per cent.
The impact of supply restrictions is already being felt by the ceramic industry. The Indonesian Ceramic Industry Association (Asaki) noted that at least six companies have begun closing production lines in September 2026 due to gas supply limitations.
The General Chairman of Asaki, Edy Suyanto, stated that the situation is exacerbated by the rise in industrial gas prices. The HGBT gas price, which was previously around US$8 per MMBTU, has risen to approximately US$9 per MMBTU, an increase of about 12%.
“Several ceramic industries have been forced to start shutting down production lines this September because they are unable to produce within PGN’s daily gas quota,” explained Edy.
According to Edy, this condition could disrupt the competitiveness of the national ceramic industry and create uncertainty for businesses that have prepared investments. This is despite the fact that the ceramic industry still has significant capacity expansion plans. In 2026, there is an additional capacity of about 38 million square metres, increasing national installed capacity from 648 million square metres in 2025 to 686 million square metres.
An additional capacity of approximately 72 million square metres per year is projected to enter between 2027 and the first semester of 2028, bringing the industry’s installed capacity to an estimated 758 million square metres. This expansion requires an investment of around Rp12 trillion and has the potential to absorb approximately 7,500 workers.
“How can the ceramic industry grow if the gas supply must be restricted? How can the manufacturing PMI grow and expand?” Edy remarked.
Industrial players hope that the HGBT allocation set by the government in ESDM Ministerial Decree Number 281.K/2026 can be fully realised. Certainty in gas supply and pricing is considered vital for industries to maintain production capacity, competitiveness, and meet commitments to both domestic and export markets.