Global Oil Price Surge Triggers LNG Price Hike

The Ministry of Energy and Mineral Resources (ESDM) has confirmed that the recent gas price increases complained about by a number of industry players do not originate from pipeline gas distributed through the Certain Natural Gas Price (HGBT) scheme, but rather from liquefied natural gas (LNG), whose price follows global crude oil movements. Director General of Oil and Gas at the Ministry of ESDM, Laode Sulaeman, explained that the LNG price formula is linked to the global crude oil price. Therefore, when crude prices rise, LNG prices also increase. “The price is also influenced by the rise in crude, the global dynamic situation. So, the formula is linked to the global crude price. The gas price also rises, the LNG I mean. That’s how it is,” Laode said at the Ministry of ESDM on Friday (26/6/2026). He added, however, that there is potential for LNG prices to decline in the future. According to him, Minister of Energy and Mineral Resources Bahlil Lahadalia has directed coordination with PT PGN to review cost components that can still be adjusted. “So, currently the HGBT Ministerial Decree will be revised according to the Minister’s direction. That’s the plan,” he said. Previously, the House of Representatives (DPR), the government, and labour unions that are part of the Layoff Mitigation Task Force held a meeting at the Nusantara III Building, Parliament Complex, Senayan, Central Jakarta, on Friday (26/6/2026). Minister of State Secretary Prasetyo Hadi stated that one of the issues discussed was the problem of industrial gas supply. “There are several issues related to gas supply to our industry that we have coordinated, and in accordance with the president’s instructions, we will immediately find a solution, possibly within one to two days we will make a decision to ensure that activities in sectors requiring gas can proceed as they should,” he said. On the same occasion, President of the All-Indonesia Workers’ Union Confederation (KSPSI), Andi Gani Nena Wa, revealed that according to association data, 55,000 factory workers are threatened with layoffs. One company, PT Granito, has already closed. “Three days ago, the company summoned and declared that all workers were laid off. Therefore, the meeting decided and hopefully within 1-2 days the government will announce a decision regarding industrial gas and hopefully it can save the situation which is very critical, I can say very critical,” Andi Gani said. Furthermore, he mentioned that the issue of the Work Plan and Budget (RKAB) was also discussed, which he said also holds the potential for layoffs of 150,000 workers. “I am confident the government will make a swift and careful decision. I assure you the government is on the side of workers and also employers, a win-win solution. And hopefully by Monday there will be a decision regarding industrial gas and the RKAB,” he added. The ceramics industry is known to be facing severe pressure due to the dwindling supply of industrial gas. According to data compiled by the association, the realisation of the Specific Industrial Gas Allocation (AGIT) from January to May 2026 only reached around 47.5% of the stipulated requirement. This supply shortage has forced the industry to seek alternatives through regasified LNG, which is far more expensive than the certain natural gas price (HGBT). The price of regasified LNG is currently reported to have reached around US$20.5 per MMBTU. As a result, the gas costs borne by the ceramics industry have soared to an average of US$15-16 per MMBTU, far above the HGBT price set at US$7 per MMBTU.