Government Seeks Middle Ground to Curb Industrial LNG Prices, Revises HGBT Regulation
The government is seeking a middle ground to reduce the burden of liquefied natural gas (LNG) prices used by industry amid global energy price volatility. One of the steps being prepared is revising the Ministerial Decree on Certain Natural Gas Prices (HGBT) to make its implementation more effective and aligned with current gas supply conditions.
Director General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM), Laode, said the government has held meetings with PT Perusahaan Gas Negara (PGN), SKK Migas, and the Ministry of Industry to synchronise upstream gas supply data with industrial needs.
"Essentially, we are matching the supply from the upstream side with the needs of the industry so that there are no more discrepancies that are then claimed as supply shortages," Laode said at the Ministry of ESDM on Friday (26/6/2026).
According to him, the government wants to ensure that industrial needs are mapped out from the start so that supply and price issues can be anticipated earlier. "We mitigate by looking at the upstream data, what the supply is like, and then what the industrial needs are. So we can get a picture from the beginning whether the supply is sufficient or not. We don’t want a situation where a shortage has already occurred and then claims of an HGBT shortage emerge, when the reality may not be that," he stated.
Laode explained that the recent polemic was not caused by an increase in the price of pipeline gas receiving the HGBT facility, but rather by the rise in LNG prices following global market dynamics. "This price is influenced by the increase in crude and global dynamics. The formula is indeed linked to the rise in global crude, so the LNG price also rises," he said.
Nevertheless, the government sees room to lower the LNG prices received by industry. The Minister of ESDM has instructed a joint evaluation with PGN and upstream business players to find an adjustment scheme that does not burden industry while still considering upstream conditions.
"There is potential for it to come down. Yesterday, the Minister gave a directive for us to discuss with PGN which parts can be adjusted. Also looking at the upstream side, so there is potential for us to set it lower than before," Laode said.
As a follow-up, the government will revise the Ministerial Decree on HGBT. The revision is expected to improve the gas distribution mechanism for industry, making the HGBT policy easier to implement and capable of responding to supply and price dynamics. "Currently, the HGBT Ministerial Decree will be revised according to the Minister’s direction. We will revise the items within it to make the HGBT more workable," Laode concluded.