Get Ready! Bahlil Urges Indonesians to Use CNG to Reduce LPG Imports

The Minister of Energy and Mineral Resources, Bahlil Lahadalia, described current global geopolitical developments as being like ‘malaria’, fluctuating and impacting the global economy.

Amidst this global uncertainty, Indonesia still requires the import of 1 million barrels of crude oil per day due to continuously declining oil and gas lifting. This is closely linked to the condition of ageing oil wells; therefore, to increase lifting, three actions can be taken: the use of technology, accelerating exploration in Eastern Indonesia with 118 potential new oil and gas blocks, and the reactivation of idle wells.

Bahlil also noted that Indonesia’s diesel consumption currently stands at 39 million kilolitres. To suppress diesel imports, the government is promoting palm oil downstreaming through the development of Biodiesel B50, which is set to commence on 1 July 2026.

Furthermore, petrol consumption reaches 40 million kilolitres, necessitating efforts to reduce petrol imports from Singapore and Malaysia. Nevertheless, Bahlil ensured that the government will not increase the price of subsidised fuel, which reaches Rp 200-250 trillion, in order to protect the poor.

Regarding the rise in non-subsidised fuel prices, Bahlil stated this is reasonable as the users are wealthier individuals. In terms of LPG, current consumption is 8.5 million tonnes per year, while production is only 1.8 million tonnes. Consequently, foreign exchange outflows for LPG imports reach Rp 150 trillion per year, prompting the government to promote Compressed Natural Gas (CNG) as a solution.

Bahlil also addressed issues regarding PLN (the state electricity company), which recently experienced power outages in some areas due to coal usage. He emphasised that coal procurement must be secured to ensure the resilience of the electricity supply.