Jakarta. Indonesia may have large natural gas reserves, but replacing imported liquefied petroleum gas (LPG) with compressed natural gas (CNG) for millions of households would require major investment in pipelines, compression facilities, and distribution systems, analysts say.

The government is considering a gradual shift from subsidized LPG to CNG to reduce imports and ease pressure on the state budget. Indonesia currently imports around 70% to 84% of its LPG needs, making the country vulnerable to global energy price swings and geopolitical tensions in the Middle East.

Fabby Tumiwa, executive director of the Institute for Essential Services Reform, said Indonesia still lacks the infrastructure needed for large-scale household CNG use.

“What is still lacking is the midstream infrastructure, particularly gas transmission pipelines, compression stations, storage, and distribution systems,” Fabby told The Jakarta Globe.

Unlike LPG, CNG must be compressed at high pressure and stored in special cylinders, requiring stricter safety standards. Fabby said households would also need regulators, gas meters, leak detectors, and stove adjustments.

“LPG and CNG have different nozzles, operating pressures, and combustion characteristics. Conversion kits and safety certifications would be necessary,” he said.

Even so, Fabby estimated CNG could be 30% to 40% cheaper than LPG, helping reduce subsidy costs. Indonesia’s annual quota for subsidized 3-kilogram LPG cylinders is around 8.17 million tons, and replacing even 10% of that volume with CNG would already have a significant impact, he added.

Energy Minister Bahlil Lahadalia recently said the government is testing 3-kilogram CNG cylinders as an alternative to subsidized LPG. Trials are being conducted in China, where the cylinders are made, as well as in Indonesia. Larger CNG cylinders are already used by hotels and restaurants.

Fahmy Radhi, an energy economist at Gadjah Mada University, said Indonesia’s domestic gas reserves make the transition strategically attractive. “If we switch to CNG, we would reduce LPG imports because the gas is produced domestically,” Fahmy said.

Still, he warned that fully replacing LPG with CNG within the next five to 10 years would be difficult because domestic gas supplies are also needed by industries and power plants.

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