Indonesia gas price surge drives LNG costs up, threatens ceramic factories

Indonesia’s Ministry of Energy and Mineral Resources said the recent rise in global crude oil prices has pushed liquefied natural gas (LNG) prices higher, linking industrial gas tariffs to the crude market. The price of LNG regasification now averages about US$20‑20.5 per MMBTU, compared with the US$7 per MMBTU set under the Fixed Natural Gas Price (HGBT) scheme. Because the allocation of gas under the specific industrial allocation (AGIT) fell to 27.5% – down from the target 80% – most manufacturers are forced to buy the pricier LNG.

Industry groups warn that the surge threatens the viability of ceramic factories in West Java. Two large plants in Bekasi face shutdown, putting roughly 55,000 workers at risk of lay‑offs within days. The government is reviewing the HGBT regulation and has instructed state gas company PGN to examine cost components and increase AGIT supply, which fell to about 47.5% of demand from January to May 2026 and may dip below 30% in June.

Officials say a potential price decline could follow if the market stabilises, but immediate action is needed to keep industrial operations running and avoid a wave of job losses.