Import Duty on LPG Abolished to Suppress Plastic Prices

Coordinating Minister for the Economy Airlangga Hartarto announced that the government is providing incentives in the form of exemption from import duties on liquefied petroleum gas (LPG) products. Previously, LPG imports were subject to a 5% import duty. Airlangga stated that this incentive is given so that industries can obtain alternative raw materials from naphtha to LPG. “Policy intervention for LPG import duties, mainly for the petrochemical industry, which, due to the war in the Strait of Hormuz, is experiencing difficulties in obtaining naphtha,” he said during a press conference at the Coordinating Ministry for the Economy office in Jakarta on Tuesday, 28 April 2026. At the same time, Airlangga said, President Prabowo has also asked the Minister of Energy and Mineral Resources Bahlil Lahadalia to seek other sources of naphtha. Naphtha is the main raw material for the petrochemical industry to produce plastic. In addition, the government is providing zero import duty incentives for plastic packaging raw materials such as polypropylene, polyethylene, high density polyethylene (HDPE), and linear low density polyethylene (LLDPE). According to Airlangga, plastic prices have surged 50 to 100% since the war broke out in the Middle East. “Therefore, for plastic packaging, because the domestic supply is also constrained by naphtha, these plastic products—polypropylene, polyethylene, HDPE, LLDPE—are all given 0% import duty,” Airlangga stated. He said this incentive policy will apply starting in May and run for the next six months.