Indonesia to Boost LPG Supply for Holiday Season Through Imports and Domestic Production

Government Increases Subsidy Quota to Meet Peak Demand

The Indonesian government has announced plans to increase the LPG subsidy quota by 350,000 metric tons to ensure adequate supply during the Christmas and New Year holidays. This decision was made during a limited meeting chaired by the President, according to Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia. The additional quota will bring the total LPG allocation to 8.51 million metric tons from the original 8.16 million metric tons.

Import Opportunities and Domestic Production

To meet the increased demand, the government will utilize both domestic production and imports. Vice Minister of ESDM, Yuliot Tanjung, indicated that the government is open to increasing imports from the United States, as Indonesia already sources more than 50% of its LPG imports from the US. The government maintains that it can adjust import volumes based on supply capabilities from partner countries.

Strategic Considerations for LPG Supply

The decision to increase LPG supply comes as the government anticipates higher consumption during the holiday season. The additional allocation is designed to prevent supply shortages and maintain market stability. Notably, the government has emphasized that the increased quota will be managed without requiring additional budget allocations, demonstrating careful financial planning in managing energy subsidies.