Jakarta – The Indonesian government is strengthening its national energy sovereignty strategy by taking concrete steps to reduce dependence on imported Liquefied Petroleum Gas (LPG). Through the Ministry of Energy and Mineral Resources (ESDM), the government is accelerating the development of alternative energy sources based on domestic resources, namely Dimethyl Ether (DME) and Compressed Natural Gas (CNG).
Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, stated that the development of these two projects aims to reduce national LPG imports, which currently stand at around 7 million tons per year.
“Our foreign exchange reserves each year, just for purchasing LPG, are around IDR 130 to IDR 140 trillion. With current global oil prices, it will certainly be even higher. And our subsidies are IDR 80 to IDR 87 trillion,” Bahlil said.
One of the main pillars in reducing imports is the downstreaming of coal into DME. Under President Prabowo Subianto’s leadership, this project is part of 13 National Strategic Downstream Projects Phase II with a total investment of IDR 116 trillion. One of the main focuses is the DME production facility in Tanjung Enim, South Sumatra, which is targeted to have a capacity of 1.4 million tons per year.
President Prabowo Subianto emphasized that downstreaming is key to Indonesia’s economic revival.
“In my opinion, this is quite historic and a very proud groundbreaking for the second phase of downstreaming, which includes 13 strategic downstreaming projects worth approximately IDR 116 trillion, including five projects in the energy sector, five projects in the mineral sector, and three projects in the agricultural sector,” Prabowo stated.
Prabowo also added that his current administration is committed to strengthening the foundations laid by previous presidents to achieve energy independence.
DME itself is an alternative energy that is chemically similar to LPG, so existing infrastructure, such as cylinders and storage facilities, can be reused with minimal adjustments. Furthermore, DME is claimed to be more environmentally friendly, reducing greenhouse gas emissions by up to 20 percent.
In addition to DME, the government has also begun testing the use of CNG for households in 3-kg cylinders. Unlike LPG, which is largely imported, CNG’s raw materials are abundant domestically, making its price predicted to be much more affordable for the public.
Bahlil Lahadalia explained that CNG use is already common in the hotel and restaurant sector with 12-kg and 20-kg cylinders. However, for wider public use, the government is currently perfecting the technology for lighter 3-kg cylinders.
“We have conducted studies on CNG. The price is much cheaper, approximately 30% cheaper,” Bahlil said.
Bahlil guaranteed that despite the switch to alternative energy, the subsidy scheme will remain in place to protect the purchasing power of the lower income groups.
“The President’s directive, for both CNG and LPG, will always prioritize helping the people we truly need to help. Therefore, I assure you that subsidies will remain essential for the people,” he concluded.
Through the integration of the DME project and the utilization of CNG, the government is optimistic that national energy stability will be strengthened, the trade balance deficit due to energy imports can be reduced, and the public will gain access to cheaper and more sustainable energy.