Indonesia focuses on energy self-sufficiency: More LPG, fewer imports

Indonesia plans a significant boost in the production of liquefied petroleum gas (LPG) to minimize reliance on imports. According to the head of the national regulator for the oil and gas industry, the country aims to increase LPG production by about one million tons annually. This initiative is driven by an ambitious promise from the new president, Prabowo Subianto: complete energy self-sufficiency through enhanced oil and gas production as well as the use of biofuels. These efforts are fueled by geopolitical uncertainties that could impact supply. The country's energy minister has set a target to double domestic LPG production, which currently stands at around 1.7 million tons annually. The path to increased production involves 15 identified gas fields, which, according to the regulatory authority SKK Migas, have the potential to deliver an additional one million tons of LPG annually. To stimulate investments in LPG production, the government will ensure that the state energy company Pertamina offers fairer prices to LPG providers. Previously, low selling prices deterred investors from investing in the industry's expansion. Interestingly, last year the country consumed a total of 6.9 million tons of the domestic market, which handled 8.7 million tons of LPG in total, through imports. To address this challenge, the government will also examine the extent to which compressed natural gas can be used as an alternative solution to reduce LPG imports.