Jakarta. Indonesia has cut import duties on plastic raw materials to zero percent in an effort to contain rising prices that could spill over into other commodities, Chief Economic Minister Airlangga Hartarto said on Tuesday.

The policy is intended to safeguard domestic manufacturing, particularly the food and beverage industry, which relies heavily on plastic packaging, as well as other sectors affected by higher input costs.

Indonesia’s major petrochemical producers, including Chandra Asri Petrochemical and Lotte Chemical Indonesia, are currently facing supply disruptions due to difficulties obtaining naphtha, a key feedstock used in plastic production.

“Our two refineries, Chandra Asri and Lotte Chemicals, have declared force majeure, especially Chandra Asri. That means they are unable to meet domestic packaging demand because of difficulties securing naphtha,” Airlangga said during the Investor Daily Roundtable at Hotel Mulia in Jakarta.

The disruption has affected downstream materials such as polypropylene and polyethylene, which are widely used in the packaging industry.

In addition, the government has reduced import duties on liquefied petroleum gas (LPG) used by industry from 5% to zero percent as a temporary substitute for naphtha.

“Naphtha can be substituted with LPG. Therefore, it was decided that LPG import duties, which are normally 5%, will be eliminated for industrial use because it will serve as a raw material,” he said.

According to Airlangga, LPG supplies from the United States and other countries remain available and can help offset short-term shortages of naphtha.

“The hope is that the shortage of naphtha can be covered by LPG, because the United States and other countries are able to supply LPG,” he said.

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