Government Waives Import Duties on LPG to Safeguard Food Inflation

The Coordinating Minister for the Economy, Airlangga Hartarto, has revealed the purpose behind the policy of providing a 0% import duty incentive for liquefied petroleum gas (LPG), reducing it from 5% to 0%.

“We have lowered the import duty on LPG from 5% to 0% so that refineries can obtain alternative raw materials from naphtha to LPG. This is crucial to maintain the supply of plastic raw materials,” Airlangga stated firmly during a press conference on Tuesday (28/4/2026).

The policy will apply for six months. In addition to LPG, the government is also providing import duty relief for plastic raw materials such as polypropylene (PP), high-density polyethylene (HDPE), and linear low-density polyethylene (LLDPE), setting them at 0% for a duration of six months.

According to Airlangga, the implementation of this policy is driven by the surge in global plastic prices, reaching 50% to 100%, due to the closure of the Strait of Hormuz. This price increase has the potential to push up packaging costs and impact the prices of food and beverage products.

“By providing 0% import duties for the next six months, we will assess the situation after that period. This policy is also being adopted by other countries like India to ensure that packaging does not lead to increases in food ingredients,” Airlangga said.

When asked about the impact of rising plastic prices on food ingredients, Airlangga admitted that his team is still calculating the effects on inflation. However, he assured that the transmission of the policy to price control might take around three to four weeks. This duration includes the procurement practices for LPG and plastic raw material needs.

“We are calculating it while monitoring. We will see. Because this still requires procurement, and it might take three to four weeks,” he explained.