Plastic Raw Materials Expensive and Scarce, Industry Minister Agus: Industry Need Not Panic

The government is emphasising continuous efforts to diversify raw materials and promote recycling to safeguard national plastic availability amid global geopolitical pressures. In response to the dynamics of prices and supplies of plastic raw materials, Industry Minister (Menperin) Agus Gumiwang Kartasasmita explained that the escalation of conflict in the Middle East region has affected the global petrochemical industry’s supply chain. Particularly for the naphtha commodity, which is the main raw material for plastics. “The escalation of conflict in the Middle East region has triggered a supply correction in industrial sectors that rely on naphtha as the main raw material. Considering that plastic is a derivative product from the petrochemical process based on petroleum, disruptions in global distribution and production routes are indeed putting pressure on upstream cost structures,” said Agus in Jakarta, quoted on Wednesday, 8 April 2026. According to him, the Ministry of Industry (Kemenperin), together with upstream petrochemical industry players, is taking several strategic steps to maintain domestic production continuity. One of them is by expanding sources of raw material supplies. “The industry is actively exploring naphtha supplies from countries outside the Middle East region to reduce regional dependence,” said Agus. In addition, the optimisation of LPG use is also being carried out as a buffer raw material in the production process. “LPG use is optimised as a buffer raw material in the production process to cover gaps in naphtha supply shortages,” he added. On the other hand, his side is also encouraging the increased use of high-quality recycled plastic as a substitute for raw materials. “The government is encouraging the increased use of recycled plastic or high-quality recycled plastic as a substitute supply to maintain stock stability in the market,” he explained. Regarding the issue of limited stock that is said to only suffice until May, Agus assured that the industry condition is still in the expansion phase. Based on data from the Manufacturing Confidence Index (IKI), the packaging industry subsector in March 2026 showed very high performance, so plastic product stocks are deemed sufficient. “Supply security efforts continue to run in parallel,” he emphasised. Nevertheless, he acknowledged a price correction at the production level in line with the rise in global raw material costs. However, the government ensures that product availability remains maintained. “There is indeed a price correction at the production level due to the increase in global raw material costs,” said Agus.