Government waives import duties on LPG

The government has waived import duties on liquefied petroleum gas (LPG) products, reducing them from 5% to 0%, as a step to support the petrochemical industry. The policy is primarily aimed at assisting the petrochemical sector, which is currently facing difficulties in obtaining naphtha feedstock due to the crisis in the Strait of Hormuz. “The incentive for LPG involves policy intervention in the form of reducing import duties, mainly for the petrochemical industry, which is experiencing difficulties in obtaining naphtha due to the conflict in the Strait of Hormuz,” said Coordinating Minister for the Economy Airlangga Hartarto during a press conference in Jakarta on Tuesday. As is known, the petrochemical industry plays an important role amid the current shortage of plastic raw materials. In line with the President’s directive, the Minister of Energy and Mineral Resources is seeking alternative naphtha sources. Therefore, as a short-term step, the government is lowering import duties on LPG to enable refineries to switch to using LPG as an alternative feedstock. The policy will apply for six months and is awaiting the issuance of the Minister of Industry Regulation (Permenperin) and the Minister of Finance Regulation (PMK). According to the Coordinating Minister, similar steps have been taken by several countries, such as India, to maintain stability in plastic packaging production costs and thus prevent increases in food and beverage prices.