Government Extends Cheap Gas Program, but Prices May Rise and Eligibility Won’t Expand
JAKARTA, investortrust.id — The Indonesian government has confirmed that the cheap gas program, known as the Specific Natural Gas Price, or HGBT scheme, will continue. However, the price of subsidized gas is likely to increase, and the program’s coverage will not be expanded to additional industrial sectors.
This was revealed by Indonesia’s Minister of Energy and Mineral Resources Bahlil Lahadalia following a cabinet meeting at the Presidential Palace complex in Jakarta on Wednesday, Jan. 22, 2025.
Bahlil stated that the price of subsidized gas, previously set at $6 per MMBTU6.5 per MMBTU due to increasing global gas prices.
“The HGBT price will no longer be $6 because global gas prices are currently rising,” Bahlil said.
He added that the gas price under the HGBT program remains lower than the price for energy purposes. According to a draft proposal by the Ministry of Energy and Mineral Resources, the price of gas for energy is around $7 per MMBTU.
“It will be around $6.5,” he noted.
In addition to the price hike, Bahlil confirmed that the program’s coverage will not be expanded. Currently, seven industrial sectors benefit from the HGBT program: fertilizer, petrochemicals, oleochemicals, steel, ceramics, glass, and rubber gloves. The Ministry of Industry had previously requested an expansion of the program’s coverage.
“We are currently calculating the balance between production and domestic demand. The seven sectors are final. This program is designed not just for one year but potentially for several years, with evaluations conducted annually and a comprehensive review every five years,” Bahlil explained.