Get Ready: LPG Replacement to Circulate This Year, This City Becomes Priority

Jakarta, CNBC Indonesia - The Ministry of Energy and Mineral Resources (ESDM) is targeting the distribution of compressed natural gas or Compressed Natural Gas (CNG) as an alternative replacement for Liquefied Petroleum Gas (LPG) to begin being consumed by the public this year. The main focus as the initial market target for distribution is urban areas, particularly on the island of Java. The Director General of Oil and Natural Gas (Dirjen Migas) of the Ministry of ESDM, Laode Sulaeman, explained that the government is currently refining the distribution model and the readiness of field infrastructure. According to him, CNG is being utilised to reduce the burden of LPG subsidies, which continue to swell each year along with the growth in household gas consumption. “It is targeted that this year it can be consumed by the public,” he said during an energy discussion event held by ASPEBINDO in Jakarta, quoted on Wednesday (6/5/2026). The implementation plan for the use of compressed natural gas is confirmed not to target all regions of Indonesia simultaneously. In the initial phase, distribution will be prioritised for major cities on Java to test the effectiveness of the distribution simulation before being expanded to other areas. “Gradually in major cities first in Java. The roadmap is that we have one because this has not been announced by the Minister, but the main point is that in the future we will reduce our LPG, we will replace it with CNG,” Laode explained. The use of CNG is projected to provide savings in subsidy costs of up to 30% because the gas source comes entirely from domestic oil and gas fields. In addition to foreign exchange efficiency, the government ensures that safety aspects are the top priority by preparing Type 4 cylinders made of composite fibre material, which is claimed to be lighter and stronger. “Research for us using CNG has been going on for quite a long time and there are two important components in the cylinder and valve parts that require technology, which finally today has been found and can be implemented,” he stated. On the other hand, gas management business entities have also expressed their readiness to support the policy to accelerate energy conversion. PT Gagas Energi Indonesia is committed to optimising existing gas filling infrastructure to ensure smooth supply to end consumers. “In terms of infrastructure, in principle, we are ready to support all directions of government policy. Coincidentally, Gagas is a subsidiary of PGN specifically for beyond pipeline,” said the Director of Operations and Commercial of PT Gagas Energi Indonesia, Maisalina, on the same occasion. The initiative to shift from LPG to CNG is the government’s effort to strengthen national energy self-sufficiency. By utilising the abundant natural gas reserves in the country, the government hopes that the stability of energy supply for the public can be maintained without being burdened by international market price fluctuations.