ESDM: Industrial LNG discount valid until 31 December 2026
Jakarta (ANTARA) - The Ministry of Energy and Mineral Resources (ESDM) has stated that the discount, or price reduction, on liquefied natural gas (LNG) for the industrial sector to US$13 per MMBTU will apply until 31 December 2026.
“That is until 31 December 2026. That is the adjustment,” said Laode Sulaeman, Director General of Oil and Gas at the Ministry of ESDM, when confirmed by ANTARA in Jakarta on Friday.
For 2027, Laode said, the government has not yet determined its policy on LNG prices.
Laode explained that the LNG price reduction was achieved by pressing down the costs of all LNG components, from upstream, through the midstream, to downstream and distribution elements.
“Essentially, it enables industry to remain strong and resilient, but the state also does not reduce anything from the upstream side,” said Laode.
The government decided to lower the price of liquefied natural gas (LNG) for the industrial sector to US$13 per MMBTU, from the previous level of around US$20–23 per MMBTU, as a step to protect the competitiveness of national industry whilst also preventing lay-offs (PHK).
The policy was adopted after the government responded to the aspirations of industrial players amid rising global gas prices that have burdened production costs.
Minister of Energy and Mineral Resources Bahlil Lahadalia said the decision was the result of intensive coordination between the government and the House of Representatives (DPR) in responding to global geopolitical dynamics affecting the national gas sector.
According to Bahlil, in recent days the government has received various aspirations from industry associations, particularly the ceramics sector, several other industrial players, and trade unions.
Following up on this input, the government and the DPR formulated concrete steps to safeguard the continuity of industry.
He emphasised that the government’s main priority is to ensure that jobs are protected.
Under the industrial gas policy scheme, the government is maintaining the industrial gas subsidy through the Special Natural Gas Price (HGBT) mechanism at a range of US$6.5 to US$7 per MMBTU.
Meanwhile, for industries using piped gas outside the HGBT scheme, whose gas supply comes from the Java region, the price remains at US$9.6 per MMBTU.
The main problem concerns industries using LNG, due to declining gas production from fields in the western part of Java.