Layoff Threat Looms Over Industrial Gas Prices, Bahlil Seeks Solution

The threat of layoffs due to high industrial gas prices has drawn the government’s attention. Minister of Energy and Mineral Resources Bahlil Lahadalia stated that his ministry is seeking a solution to ease the cost burden faced by industrial gas users outside the specific natural gas price (HGBT) scheme, in order to maintain business continuity and jobs. According to Bahlil, the government currently applies two gas price schemes: HGBT, which receives state support, and the general or non-HGBT gas price, which follows market conditions. He explained that the price increase in the non-HGBT group is influenced by declining gas production from several wells, particularly in West Java, forcing supplies to be supplemented with liquefied natural gas (LNG) from Papua, Sulawesi, and Kalimantan, which incurs higher distribution costs. “To cover that, we use LNG. LNG is brought from Papua, Sulawesi, Kalimantan, and that adds costs. We are currently looking to mediate this so that the industry is not burdened with high prices,” Bahlil said on the sidelines of the Energy Forum in Jakarta. He stressed that the government has communicated with industry players, associations, and labour unions to discuss the issue. The Ministry of Energy and Mineral Resources, together with Pertamina, is currently holding technical discussions to find a price formula that can maintain the competitiveness of national industry. “I am now in a technical meeting with Pertamina to find an ideal figure so that our industry can survive,” Bahlil said. He assured that the overall national gas supply remains secure, noting that the current problem is not a supply shortage but the price increase felt by several industrial sectors outside the HGBT scheme. Previously, the President of the All-Indonesia Workers’ Union Confederation (KSPSI), Andi Gani Nena Wea, received complaints from representatives of 15 companies and 15 leaders of the KSPSI Chemical, Energy, and Mining Workers’ Union units in Bekasi, West Java. During the meeting, industry players voiced concerns that high gas prices are burdening company operations and threatening business continuity. Gani revealed that if the government does not take concrete steps immediately, around 50,000 workers could potentially be laid off. He noted that one large ceramics company in Bekasi has already announced plans to furlough hundreds of workers due to high industrial gas costs. “This situation is very worrying. If it is not addressed soon, a wave of layoffs could occur in the near future,” Andi Gani said. He added that he had conveyed the matter directly to the Minister of Energy and Mineral Resources, who responded quickly by gathering all stakeholders to find a solution. Besides the industrial gas issue, Gani also highlighted the potential for layoffs in the nickel sector triggered by the licensing process for Work Plans and Budgets at the ministry. While supporting law enforcement and mining governance, he requested that the process not lead to increased layoffs in the related sector.