LPG Imports Still at 75 Percent, Coal-Based DME Could Become Alternative Replacement
JAKARTA, KOMPAS.com - Coal liquefaction into Dimethyl Ether (DME) is considered an appropriate alternative to reduce liquefied petroleum gas (LPG) imports. This is supported by abundant raw material availability and adequate infrastructure.
Energy observer Iwa Gurniwa stated that currently, around 75 percent of the national LPG requirement still relies on imports.
LPG import volumes even reach 8.3 million tonnes per year, valued at around $4.2 billion in 2025.
According to him, this situation not only burdens the trade balance but also increases risks from global energy price fluctuations and subsidy pressures reaching Rp 80 trillion to Rp 90 trillion per year.
He explained that the government currently has three main options to reduce LPG dependency, namely city gas networks (jargas), electric stoves, and coal-based DME.
However, compared to the other two options, DME is considered the most ready to implement because it can utilise existing LPG infrastructure.
In addition, Indonesia also has abundant reserves of low-rank coal as raw material.
“DME allows for quick LPG substitution without major changes at the household level. This is an advantage not possessed by other options,” he said.
The government has also inaugurated the development of a coal-to-DME production facility project in Tanjung Enim.
This factory is designed to have a production capacity of 1.4 million tonnes per year or equivalent to around 1 million tonnes of LPG.
The DME product will later be absorbed by Pertamina through Pertamina Patra Niaga.
The facility will utilise low-calorie coal that has not been optimally utilised so far, although its availability in Indonesia is quite abundant.
Furthermore, Iwa assessed that the most appropriate approach to reduce LPG imports is a region-based energy diversification strategy.
According to him, jargas is suitable for large cities with high density, electric stoves for areas with electricity surplus, while DME can be developed in coal-producing regions or areas not reached by gas pipeline networks.
He estimated that if all three options are implemented in parallel, the potential LPG substitution could reach 4.5 million to 6.5 million tonnes or around 55-75 percent of current total LPG imports.
“There is no silver bullet. What is needed is an adaptive policy portfolio according to regional characteristics,” Iwa concluded.