Production Decline Blamed for Rising Industrial Gas Prices

Minister of Energy and Mineral Resources Bahlil Lahadalia has stated that the increase in the certain natural gas price (HGBT), which has reached US$20 per MMBTU, is due to declining production from several gas fields in West Java. He explained that the drop in production has forced the supply for industries to be covered using liquefied natural gas (LNG), resulting in higher costs compared to using piped gas from domestic fields. “Some of our wells in the regions, especially West Java, are experiencing a production decline. To cover this, we use LNG. This LNG is brought from Papua, Sulawesi, Kalimantan, and that incurs additional costs,” Bahlil told reporters after attending the CNBC Energy Forum in Jakarta on Thursday, June 25, 2026. Bahlil explained that the additional logistics and distribution costs for LNG are the main factors driving up gas prices for several industrial sectors. He claimed the government is currently seeking a middle ground to ensure gas supply needs are met without excessively burdening business operators. “That is what we are trying to mediate so that the industry is not given a high burden,” he said. As a follow-up step, Bahlil admitted to having held a series of meetings with various stakeholders, including industry associations, labour unions, and state-owned gas companies. The government is currently discussing a pricing formula deemed ideal so that industries can continue to operate competitively. “I have already met with them, with the associations and the workers. Now I am in technical meetings with Pertamina to find the ideal figure so our industry can survive,” he said. Meanwhile, Deputy Speaker of the Indonesian House of Representatives Sufmi Dasco Ahmad stated that the parliament is ready to mitigate reports of potential layoffs affecting more than 50,000 workers at a ceramic factory in Bekasi, West Java. Dasco made the statement in response to a report from the Chairman of the All-Indonesia Workers Union Confederation, Andi Gani Nena Wea, who mentioned that layoffs could occur within 7 to 10 days at one of the largest ceramic factories in Bekasi due to the increase in industrial gas prices. To find a solution, Dasco has scheduled a meeting with the President Director of PT Pertamina and representatives of the affected workers.