Indonesia Increases LPG Subsidy Quota to Support Holiday Demand

Government Boosts LPG Supply for Christmas and New Year

The Indonesian government has announced a significant increase in the LPG subsidy quota by 350,000 metric tons to ensure adequate supply during the upcoming Christmas and New Year (Nataru) holiday season. This decision was made during a limited meeting chaired by the President on Thursday, November 27, 2025.

Budget-Neutral Decision

Minister of Energy and Mineral Resources, Bahlil Lahadalia, emphasized that the increase in LPG subsidy quota was achieved without requiring additional budget allocation. The government managed to accommodate this increase due to the currently low global crude oil prices, as reflected in the Indonesian Crude Price (ICP) benchmark.

Economic Rationale

The decision to boost the LPG quota by 350,000 metric tons brings the total LPG allocation to 8.51 million metric tons, up from 8.16 million. This strategic move aims to maintain energy supply stability during the peak holiday season when LPG consumption typically surges. The government anticipates that the additional quota will effectively meet the increased demand from both household and commercial sectors.

Market Impact

This policy decision demonstrates the government's proactive approach to managing energy subsidies and supply during critical periods. By leveraging favorable global oil prices, the government can enhance energy security without straining fiscal resources. The measure is expected to have a positive impact on both consumers and businesses relying on LPG during the holiday season.