Jakarta – The Indonesian Chamber of Commerce and Industry (Kadin) has urged the government to open opportunities for domestic industries to import natural gas, in light of the limited domestic gas supply, which currently meets only around 60% of industrial demand.

The request was delivered by Saleh Husin, Vice Chairman for Industry at Kadin Indonesia, during a discussion titled “Ensuring Sustainable Natural Gas Supply for National Industry: Policy Synergy, Supply, and Competitiveness” held at Menara Kadin, Jakarta, on Tuesday (October 7, 2025).

In addition to Saleh Husin, the discussion—moderated by economist Aviliani—also featured Laode Sulaeman, Director General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM); Djoko Siswanto, Head of SKK Migas; Saleh Partaonan Daulay, Chairman of Commission VII of the House of Representatives; and Arief Kurnia, President Director of PT. PNG Tbk.

According to Saleh, although the government has set a Special Natural Gas Price (HGBT) of USD 7 per MMBTU for seven key industries through Ministerial Decree No. 255K/2024, the actual supply reaching industrial users is still far from adequate.

“Our friends in industry are only receiving around 60% of the gas supply under the HGBT scheme,” said Saleh.

Natural gas, he added, is a vital component in the production processes of various manufacturing sectors, including fertilizer, steel, cement, pharmaceuticals, ceramics, textiles, and food and beverages. The shortfall in supply is threatening the competitiveness and production capacity of domestic industries.

Kadin sees gas imports as a temporary solution until national gas exploration projects scheduled for 2026–2028 begin production. Opening access to imports would help lower industrial gas prices, increase production capacity, and maintain the competitiveness of Indonesia’s manufactured exports.

“The government could allow imports for a limited period while waiting for exploration results. Once domestic supply is sufficient, imports could be phased out,” explained Saleh.

Kadin also highlighted the mismatch between gas production and consumption regions. Most surplus supply is concentrated in eastern Java, while the highest demand comes from western Java, leading to inefficient distribution and high logistics costs.

To ensure that gas import policies are effective and non-distortive, Kadin urged the government to issue a Government Regulation (PP) to provide legal certainty for industrial gas supply and distribution.

“The industrial sector needs long-term policy certainty. The regulation should also allow industries to independently import gas and develop gas pipeline infrastructure within industrial zones,” said Saleh.

Kadin also proposed that Domestic Market Obligation (DMO) for gas be adjusted to favor national manufacturing, so that industrial expansion and resilience can be achieved optimally. Currently, industrial utilization rates remain at around 60–65%.

Risk of Deindustrialization

Saleh warned that excessively high gas prices could cause domestic industries to lose their competitiveness. If gas prices reach USD 16.77 per MMBTU, many industrial players risk shutting down operations or relocating their facilities to neighboring countries with lower energy costs.

“If gas prices are too high, we could see industries relocating to neighboring countries where energy is more competitive,” he stated.

Such a shift, he added, would likely lead to a surge in finished goods imports, threaten domestic industry, and reduce the manufacturing sector’s contribution to national economic growth.

Kadin stressed that energy supply sustainability, including natural gas, is crucial to realizing Indonesia’s economic growth target of 8%, as outlined in President-elect Prabowo Subianto’s Asta Cita agenda.

“To grow at 8%, industry must grow first. Without a strong industrial base, we won’t achieve that target,” said Saleh.

Kadin hopes the government will swiftly take strategic measures, including permitting controlled gas imports, to ensure that Indonesia’s industries remain resilient, efficient, and globally competitive.