CNG to Become LPG Alternative, Targeted for Implementation This Year
Jakarta, CNBC Indonesia - The Ministry of Energy and Mineral Resources (ESDM) is targeting the implementation of Compressed Natural Gas (CNG) usage as a replacement for 3kg LPG this year. This is being done as an effort to provide an alternative gas fuel for the public.
The use of CNG is considered important to curb dependence on LPG imports, which currently reach 7 million tonnes per year. In addition, this policy is expected to reduce the significant burden of energy subsidies borne by the state.
The Director General of Oil and Gas (Dirjen Migas) of the Ministry of ESDM, Laode Sulaeman, said they are refining the distribution model and preparing supporting infrastructure in the field. He stated that the acceleration of this conversion is primarily to reduce the portion of gas imports.
“It is targeted that this year it can be consumed by the public,” he said during a discussion event by ASPEBINDO in Jakarta, quoted on Wednesday (6/5/2026).
The government records that national LPG production has been on a declining trend since 2010, now remaining at around 1.6 million tonnes per year. This condition forces Indonesia to bring in large supplies from abroad to meet domestic needs, which are mostly allocated to the household sector.
“That means from year to year, with population growth and economic growth, we will continue to increase LPG imports if we cannot convert to other sources,” he added.
Unlike LPG, whose raw materials are limited domestically, the gas source for CNG is available from national oil and gas fields, thus saving foreign exchange while cutting subsidy costs by up to 30%.
“If this gas comes from our own production and the distance is not far, after calculations and simulations, it can save around 30 percent as announced by the Minister,” he said.
In the initial stage, CNG distribution is planned to target areas with the most ready supporting infrastructure. The government is focusing on starting simulations of this gas usage in several urban areas before implementing it evenly across Indonesia.
“Gradually in big cities in Java first. The roadmap is, of course, we have it because this hasn’t been announced by the Minister yet, but the point is that in the future we will reduce our LPG and replace it with CNG,” he emphasised.
On the other hand, Energy Minister Bahlil Lahadalia is also studying the provision of subsidies for CNG usage. “Everything is being studied. The subsidy option must still be there, it’s just about the volume, which we need to assess,” Bahlil explained after a limited meeting at the State Palace on Tuesday (5/5/2026).
As is known, Indonesia’s LPG needs are still supported by imports of 75% to 80%. Of which, 7 to 8 million tonnes are used for household needs.
The issue is that amid current political turmoil, Indonesia also needs certainty for LPG imports.
“For that reason, we are formulating to find other alternatives. CNG is one of the alternatives. Now, CNG is already used by hotels, restaurants, and MBG, it’s there, but in the 20kg and above classification, some in 10kg and above,” Bahlil explained.
Currently, they are trialling the introduction of CNG in smaller sizes or 3kg. It is estimated that the trial can be completed in 2-3 months.