Indonesia Cuts Industrial LNG Price to US$13 per MMBTU

2 hours ago 3

TEMPO.CO, Jakarta - Indonesian Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia has set the price of Liquefied Natural Gas (LNG) for the industry at US$13 per MMBTU. According to Bahlil, the price is the result of negotiations between the government, LNG producers, and PT Perusahaan Gas Negara (PGN). These negotiations aim to ensure the industry's sustainability, particularly in western Java.

"So we have decided on the price of US$13 per MMBTU for industrial LNG," said Bahlil in a press conference at the parliament complex on Monday, June 29, 2026.

Bahlil stated that the price has decreased from around US$23 per MMBTU. The increase in LNG prices has burdened the industry, putting thousands of workers at risk of layoffs.

He explained that the price spike was due to the decline in gas production from the oil and gas block in West Java. In order to meet the industry's demand, supply was redirected to use LNG from Papua, Sulawesi, and Kalimantan. This LNG had to be transported by ship.

In addition to transportation costs, LNG requires gasification before it can be distributed through pipeline networks. This series of processes makes the gas price received by the industry much more expensive.

"Why is the price of LNG high? Because it is taken from areas that require transportation costs, then regasified, and only then distributed through pipelines. That's where the additional costs arise," he said.

Bahlil announced that the decrease in LNG prices will take effect today. According to him, the government has lowered prices by reducing margins throughout the supply chain, including upstream contractor cooperation contracts (KKKS), government revenues, and PGN's margins in the downstream sector.

"Everyone is affected. So, from the government's side, from the upstream, there is a part of the government. Then in the downstream as well, we ask them to reduce the costs. We also reduced Pertamina. So, both from the KKKS, the government, and from PGN, all have received cuts," Bahlil said.

Read: Indonesia Cuts Fuel Imports, Minister Bahlil Says Importers Are Unhappy

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