Industry Ministry Confident Domestic Gas RPP Will Accelerate Economy to 8 Percent
If the Government Regulation (RPP) on Natural Gas for Domestic Needs is ratified into a Government Regulation, the issues surrounding industrial gas, particularly the Specific Natural Gas Price (HGBT) programme, will be permanently resolved.
The Ministry of Industry (Kemenperin) believes that the ratification of the Draft Government Regulation regarding Natural Gas for Domestic Needs will serve as a primary driver for increasing the competitiveness of the manufacturing industry, while simultaneously accelerating the achievement of the 8 per cent national economic growth target.
Ministry of Industry Spokesperson Febri Hendri Antoni Arif stated that the ratification of the RPP will provide certainty regarding gas supply and pricing for industries, thereby resolving the issues that have long hindered the implementation of the Specific Natural Gas Price (HGBT) programme.
“If the RPP on Natural Gas for Domestic Needs is ratified as a Government Regulation, then the industrial gas problem, especially the HGBT programme, will be permanently resolved. There will no longer be supply disruptions and price fluctuations that result in decreased utilisation and potentially trigger layoffs,” he said in a statement in Jakarta on Saturday.
“This policy will also make the national upstream gas sector more competitive, thereby strengthening President Prabowo’s national energy security programme. We are also confident that the ratification of this RPP will enable the processing industry to contribute significantly to achieving President Prabowo’s 8 per cent economic growth target by 2029,” he added.
The RPP, he noted, was initiated by the Ministry of Industry in November 2024 and has received support from the Coordinating Ministry for Economic Affairs. However, to date, it has not been seriously followed up by the Ministry of Energy and Mineral Resources (ESDM).
Furthermore, according to Febri, the implementation of the HGBT policy has not been optimal due to the existence of the Certain Industrial Gas Allocation (AGIT) policy. Based on a comprehensive evaluation, the implementation of the ESDM Ministerial Decree regarding the allocation of domestic gas volumes in the field has not been fully realised, threatening the productivity and competitiveness of the national manufacturing industry.
He explained that HGBT is essentially one of the main attractions for investors as well as an engine for national economic growth. However, the realisation of gas supply has actually continued to decline.
“In 2025, the volume of Specific Natural Gas received by the industrial sector is currently recorded at only around 60 per cent to 70 per cent of the allocation legally established in ESDM Ministerial Decree Number 76K/2025. There is a wide gap between regulation on paper and the commitment to physical supply from gas producers in the field,” said Febri.
He revealed that the gas allocation volume in ESDM Decree Number 76/2025 only reached 57 per cent compared to the allocation in ESDM Decree Number 91/2023. This condition is exacerbated because the established quotas are not being met by both upstream gas producers and oil and gas trading companies.
According to the Ministry of Industry, the most critical gas supply crisis is occurring in the West Java (JBB) and Lampung corridors. Internal data shows that the realisation of HGBT gas supply in JBB has continuously declined from 88.72 per cent in 2023 to 78.68 per cent in 2024, then dropped again to an average of 65.69 per cent throughout 2025.
As of April 2026, the realisation only reached an average of 46.36 per cent and even touched 37.50 per cent of the allocated amount.
This condition has forced industrial players to switch to using gas from the regasification of Liquefied Natural Gas (LNG), which is priced much higher than HGBT. Based on industry data, the price of PGN’s LNG regasification gas in June 2026 is projected to reach 20.57 USD per MMBTU, significantly higher than in previous periods.
He also assessed that the price of industrial gas from LNG regasification is more expensive than the export price of Tangguh LNG, which is estimated to be in the range of 6 USD to 7 USD, assuming an oil price of 70 USD to 80 USD.
“President Prabowo always cites Article 33, Paragraph (3) of the 1945 Constitution in his various speeches. Therefore, if the price of industrial gas from LNG regasification is indeed more expensive than the Tangguh LNG export price, then industrial gas producers, especially HGBT producers, are not complying with the President’s orders and directives. The high cost of industrial gas potentially threatens the continuity of industrial operations and the livelihoods of workers,” said Febri.
On the other hand, the Ministry of Industry emphasised that the implementation of HGBT has provided significant economic benefits. Based on an evaluation of the 2020-2025 period, the policy generated an economic added value of Rp592.89 trillion, originating from increased industrial sales, tax revenue, new investments, and fertiliser subsidy savings.
To address these issues, the Ministry of Industry has proposed short-term measures, including the revocation of the AGIT policy and ensuring that producers provide stable gas supply and pricing in accordance with the provisions in the ESDM Ministerial Decree.
Meanwhile, the long-term solution being pushed is the immediate ratification of the RPP on Natural Gas for Domestic Needs into a formal regulation.