University of Indonesia Researcher: Plastic Crisis Reflects the Fragility of Indonesia's Petrochemical Industry Structure

Jakarta — The surge in national plastic prices is seen as exposing fundamental problems in Indonesia’s petrochemical industry structure that have long remained unresolved. The domestic industry remains highly dependent on imported feedstocks, making it vulnerable whenever global shocks occur.

Mohamad Dian Revindo, a researcher and lecturer at the University of Indonesia, says that the current plastic crisis is not merely due to higher global prices or international geopolitical tensions, but a consequence of structural weaknesses in the national petrochemical industry. “In general, this plastic crisis boils down to one main problem: the plastic crisis today is not merely price volatility and geopolitical issues; it is the consequence of structural weaknesses that have long been neglected,” Revindo said on Monday, 18 May 2026.

He explained that Indonesia’s upstream petrochemical capacity is the lowest in the ASEAN region when measured by population. While rival countries such as Vietnam and Thailand continue to expand industrial capacity through 2035, Indonesia has not yet secured any confirmed expansions. This condition means the domestic industry has repeatedly faced costly emergency responses whenever global disruptions occur. “Shifting import sources merely moves the dependence, not solving the structural problem,” Revindo said.

Revindo highlighted the shift of naphtha imports from the Middle East to the United States, which brings higher logistics costs. About 70 percent of the nation’s naphtha needs previously came from the Middle East, but supply chain disruptions have pushed import diversification to regions much farther away. He notes that increasing shipping distances up to threefold automatically raises the cost of shipping amid sharply rising global naphtha prices. “All of Indonesia’s naphtha needs remain import-dependent,” Revindo said.

The pressure is seen as hitting not only the industrial sector but also potentially affecting the balance of trade stability and national foreign exchange reserves. Although Indonesia continues to post a trade surplus for 71 consecutive months, the pressure from energy and feedstock imports is believed to undermine economic resilience amid global geo-economic uncertainties.