Karawang. Energy and Mineral Resources Minister Bahlil Lahadalia on Thursday inaugurated a new liquefied petroleum gas (LPG) processing plant in Cilamaya, Karawang Regency, West Java, with a production capacity of approximately 160 tons per day.

The facility, jointly operated by Energi Nusantara Perkasa and Pertamina Hulu, is part of the government's efforts to increase domestic LPG production and reduce dependence on imports.

Bahlil said the plant was expected to supply around 15% of LPG demand in Jakarta and West Java.

Indonesia currently consumes approximately 8.5 million tons of LPG annually. Including demand from petrochemical industries in Cilegon, such as Lotte and Chandra Asri, total requirements could reach 11 million to 12 million tons per year, Bahlil said.

Domestic LPG production, however, stands at no more than 1.8 million tons annually, leaving Indonesia heavily dependent on imports to meet demand.

Although the Cilamaya plant's capacity is relatively small compared with national consumption, Bahlil said expanding domestic production through multiple facilities could generate substantial savings over time.

"It's fine if the capacity is small. As more plants are developed, their combined output will eventually become significant," he said.

The country's dependence on imported LPG also places considerable pressure on public finances, with annual LPG subsidies reaching approximately Rp 87 trillion ($4.85 billion).

Bahlil added that the government was not solely focused on building large-scale processing facilities. Optimizing domestic gas resources, including those capable of supporting smaller and medium-sized plants, would also help reduce imports.

CNG Seen as Alternative to LPG
Bahlil explained that Indonesia produces sufficient liquefied natural gas (LNG) to serve domestic needs and exports part of its output, but LNG cannot necessarily be converted directly into LPG.

Much of Indonesia's natural gas consists primarily of methane and ethane, known as C1 and C2 hydrocarbons, while LPG is composed mainly of propane and butane, or C3 and C4 hydrocarbons.

As a result, the government is exploring compressed natural gas (CNG) as an alternative fuel that could make greater use of domestic gas resources.

Bahlil said CNG could be 30% to 40% cheaper than LPG, making it a potentially attractive option for commercial and household consumers.

He noted that CNG cylinders were already being used by some restaurants and hotels, while smaller cylinders intended for household use remained under testing.

"Some restaurants and hotels are already using 12-kilogram CNG cylinders, while the 3-kilogram version is still being tested," Bahlil said.

The minister said wider CNG adoption, alongside increased domestic LPG production, could help Indonesia reduce its reliance on imported cooking gas and ease the financial burden of energy subsidies.

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