CNG Could Replace Indonesia's LPG, Already in Use in This Industry

Jakarta, CNBC Indonesia - The Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, has emphasised that Compressed Natural Gas (CNG) is one of the government’s alternatives to replace the role of Liquefied Petroleum Gas (LPG). CNG is already in use in the hotel industry.

Bahlil stressed that Indonesia’s LPG needs are still supported by imports amounting to 75% to 80%. Of this, 7 to 8 million tonnes are used for household needs.

The issue arises when political upheavals, like those currently occurring, also require certainty in LPG imports for Indonesia.

“In light of this, we are formulating other alternatives. CNG is one of them. CNG is already used by hotels, restaurants, and MBGs; it exists, but in classifications of 20 kilograms and above, or 10-10 kilograms and above,” explained Bahlil.

Currently, his side is trialling the introduction of CNG in smaller sizes or 3 kilograms. It is estimated that the trial can be completed in 2-3 months.

“In 2-3 months, we will get the results, and if it is declared firm, we will carry out the conversion. Why? Because CNG’s raw materials are all available domestically. C1, C2 gas,” stated Bahlil.

Bahlil estimates, based on existing studies, that using CNG will be cheaper than LPG or save 30%.

“Why is it cheaper? First, the gas is available domestically, and the industry is also domestic. So we don’t import; the transportation costs alone can cover it.”

“And second, it is located in almost all regions with gas sources, so it is far more efficient. And if asked whether it is already performing on the road or not, on a large scale it is already running. In Java regions, CNG is already used. Hotels, restaurants, then MBG kitchens are already using it,” Bahlil asserted.