LNG price cuts a welcome boost for industries: Ministry

The Indonesian Ministry of Industry has emphasized that the government's policy of lowering liquefied natural gas (LNG) prices serves as a welcome boost for the industrial sectors amid current economic challenges. In a statement confirmed in Jakarta on Tuesday, the ministry's spokesperson, Febri Hendri Antoni Arif, noted that a reliable supply of natural gas at competitive prices is a critical factor for sustaining investment and productivity across strategic industries. Lowering LNG prices is expected to further ease the energy cost burden on businesses, allowing production activities to run more efficiently. The spokesperson expressed appreciation to Deputy Speaker of the House of Representatives (DPR) Sufmi Dasco Ahmad for bringing together stakeholders to find a solution to the industrial gas supply issue. The ministry emphasized three primary demands from industry players. First, gas distribution under the Specific Industrial Gas Allocation (AGIT) scheme must be 100 percent fulfilled in accordance with regulations, without any curtailments. Second, allocated gas volumes must not be unilaterally reduced, as this would directly impact production capacity and plant efficiency. Third, energy supply reliability must be maintained to boost the competitiveness of Indonesian products in both domestic and export markets. "Industry players expect that what the government has already decided regarding AGIT will be fully implemented. There should be no cuts or volume reductions, because any drop in supply will immediately dent our manufacturing productivity," Arif said. The ministry reaffirmed its commitment to continuing to monitor the outcomes of its coordination with the DPR, as well as with relevant ministries and agencies, to ensure a steady gas supply for industries. On Monday, the Indonesian government announced a reduction in industrial LNG prices to US$13 per million British thermal units (MMBtu), down from around US$20-23 per MMBtu, to maintain national industrial competitiveness and preventing layoffs. The policy was taken in response to concerns raised by industry players as surging global gas prices continue to weigh on production costs.