Criteria for Industries Eligible for US$13/MMBTU LNG Price
The Ministry of Energy and Mineral Resources (ESDM) has revealed the criteria for industries eligible to receive a reduced Liqueflag Natural Gas (LNG) price of US$13 per MMBTU, effective from Monday, 29 June 2026.
Ministry spokesperson Dwi Anggia explained that the gas price adjustment will not be applied uniformly across all industrial sectors. Anggia emphasised that the government is focusing on industries in the West Java region that are experiencing a decline in piped gas supply. This measure aims to maintain the operational continuity of industries affected by the reduction in piped gas availability.
“The industrial gas price of US$13 per MMBTU does not apply to all industries; it is specifically for non-HGBT (Certain Gas Prices) industries affected by the decline in piped gas supply, particularly in the West Java region. This priority is given to industries with labour-intensive characteristics, an export orientation, and a very high dependency on gas as both a raw material and a process fuel,” she explained when met at the Ministry of ESDM office in Jakarta on Tuesday (30/6/2026).
The determination of the US$13 per MMBTU price is the result of a cost adjustment agreement throughout the gas production supply chain, from upstream to downstream. The government has ensured that there are no new fiscal incentive or subsidy schemes in this policy; instead, it relies on a mutual commitment to efficiency between the government, Production Contract Holders (KKKS), and distribution business entities.
“This is certainly a shared commitment borne collectively at this time—from upstream to midstream to downstream. As the Minister stated yesterday, there will be adjustments in the reduction components from upstream to downstream, involving the KKS, PGN, and downstream entities,” she continued.
She revealed that the LNG supply allocated for domestic industry will be sourced from various gas fields outside Java, including the Tangguh, Sulawesi, and Papua regions. Although the government is encouraging increased domestic absorption, the policy is designed to ensure that commitments to international gas deliveries are not disrupted.
“This is to ensure that the LNG supply for industry remains operational and guaranteed, even while other national energy needs are met. This strategy prioritises domestic resilience without completely sacrificing revenue. Most importantly, exports must not be disrupted,” she said.
Consequently, the government will continue to conduct phased evaluations of the implementation of these industrial gas prices to ensure they are targeted correctly and remain effective.
Previously, the Minister of Energy and Mineral Resources, Bahlable Lahadalia, officially reduced the LNG price for the industrial sector to US$13 per MMBTU from the previous range of US$20 - US$23 per MMBTU on Monday (29/6/2026).
LNG market prices typically depend on global crude oil prices. When global oil prices surge due to energy supply volatility, LNG prices tend to rise accordingly. Fundamentally, according to Bahlil, the Certain Gas Price (HGBT) remains at US$6.5 - US$7 per MMBTU, and piped gas prices for industry remain around US$9.6 per MMBTU.
However, the current issue and primary grievance is that industries are forced to purchase part of their gas via LNG due to declining production from refineries in West Java that cover West Java, Banten, and Jakarta.
“As a result, (industries) are using LNG. This LNG is sourced from Papua, Sulawesi, Kalimantan, and several other regions outside Java, and the price has risen to market rates of US$20 to US$23 per MMBTU,” said Bahlil during a press conference following a meeting with the Deputy Speaker of the House, Sufmi Dasco Ahmad, at the DPR RI Building on Monday (29/6/2026).
Based on this, Bahlil stated that industries requested government intervention. Following instructions from President Prabowo Subianto to protect industries and jobs, the government has lowered the upstream gas price derived from LNG to US$13 per MMBTU.
“We have reported to the President (Prabowo Subianto) that it has been lowered to US$13 per MMBTU,” Bahlil asserted.