Indonesia Scraps Import Duties on LPG and Plastics to Combat Hormuz-Driven Petrochemical Crisis

JAKARTA, Investortrust.id — The Indonesian government is aggressively intervening in the commodities market to shield the domestic economy from a deepening petrochemical supply crisis. In an emergency press conference on Tuesday, April 28, 2026, Coordinating Minister for Economic Affairs Airlangga Hartarto announced that the state would immediately drop import duties on LPG and a range of raw plastic products to 0%.

The blockade of the Strait of Hormuz has essentially choked off Indonesia's primary supply of naphtha, a critical feedstock for refineries and plastic production. By pivoting to LPG as an alternative and removing tariffs on imported resins, the government is attempting to stave off a massive inflationary wave in the food and beverage sectors. For global investors, this move signals Indonesia’s readiness to deploy swift protectionist fiscal tools to maintain domestic price stability during geopolitical shocks.

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Pivoting to LPG Feedstock

With naphtha becoming increasingly difficult for the petrochemical industry to secure, the government is incentivizing a shift in manufacturing inputs. "LPG import duties have been reduced from 5% to 0%," Hartarto confirmed at his Jakarta office.

This decision follows a direct order from President Prabowo Subianto to Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia to diversify naphtha sources. The zero-duty status allows industrial players to bridge the gap by utilizing LPG to keep refineries operational.

Six-Month Reprieve for Plastic Resins

To further insulate the consumer market, the 0% duty policy extends to high-demand plastic materials including Polypropylene (PP), Polyethylene (PE), and High-Density Polyethylene (HDPE), which were previously taxed between 5% and 15%.

This specific relief is slated to last for six months. "We are following [moves like] India so that this packaging does not also increase the prices of food and beverages," Hartarto explained, noting that without this intervention, packaging costs could skyrocket by up to 100%.

The Ministry of Industry and the Ministry of Finance are currently finalizing the technical regulations to implement these tariff changes immediately.

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Impact on Key Listed Entities

This policy is set to significantly impact various companies on the Indonesia Stock Exchange, particularly primary resin producers like Chandra Asri Pacific (TPIA), which manufactures Polypropylene under the Trilene brand and HDPE and LLDPE under the Asrene brand. Barito Pacific (BRPT) stands to benefit as the parent holding company of TPIA, alongside Lotte Chemical Indonesia (FPNI), a South Korean-owned producer based in Merak that provides resins for bags and packaging.

The relief also extends to downstream plastic processors and packaging manufacturers who utilize these resins for consumer and industrial goods. In the consumer segment, Panca Budi Idaman (PBID) and Sinergi Inti Plastindo (ESIP) produce well-known brands like Tomat and Diana plastic bags, while Indopoly Swakarsa Creative (IPOL) supplies specialized flexible packaging for snacks. Industrial packaging players such as Asiaplast Industries (ASPR), known for its BPA-free water gallons and oil containers, and Megapratama Ferindo (EPAC), a food wrapping specialist currently targeted for acquisition by Triple B, are also positioned to see cost improvements.

Specialized container manufacturers like Berlina (BRNA), which produces toothpaste tubes, and Champion Pacific Indonesia (IGAR), which focuses exclusively on pharmaceutical packaging, are similarly impacted by the duty removal. Finally, beverage industry suppliers such as Primadaya Plastindo (PDPP) will find support for their operations as they supply major brands like Aqua and Indofood while transitioning their production from polycarbonate to PET gallons.

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