Indonesia's Abundant Gas Reserves: Why Still Importing LPG? Bahlil Explains

Jakarta, CNBC Indonesia - The Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, has explained the reasons behind the high levels of Liquefied Petroleum Gas (LPG) imports, despite Indonesia being known for its abundant natural gas reserves.

According to Bahlil, the main issue is not the general availability of gas, but the type of gas content that Indonesia possesses. LPG requires specific components in the form of propane (C3) and butane (C4), whereas the majority of Indonesia’s natural gas is dominated by methane (C1) and ethane (C2).

“The problem is the question I always get: why don’t we produce LPG domestically? We have abundant gas. We no longer import gas. All gas is now for domestic industry. We even export 30% of our total gas lifting. But why do we import LPG? Because LPG’s raw materials are C3, C4… C3 and C4 are different from most of our gas; our gas is C1, C2. C3 and C4 are limited, that’s why our domestic industry for it is small,” said Bahlil at the IPB Alumni Synergy for the Nation event on Saturday (2/4/2026).

Bahlil explained that the limitation in C3 and C4 content means domestic LPG production is unable to meet national needs. Currently, Indonesia’s LPG requirement is around 8.6 million tonnes per year, while domestic production is only in the range of 1.6 to 1.7 million tonnes.

With this gap, Indonesia still has to import about 7 million tonnes of LPG every year. He then highlighted the significant burden borne by the state due to LPG imports.

Bahlil revealed that the foreign exchange spent on LPG imports reaches Rp137 trillion per year, with subsidies amounting to around Rp80 trillion to Rp87 trillion.

“Out of that Rp137 trillion, the state subsidises Rp80 to Rp87 trillion per year, folks. Don’t applaud; this is sad for me. It’s sad. I sit and think: are we smart or half-smart?” he said.