JAKARTA: Industry players have raised concerns over gas supply restrictions imposed by state-owned Perusahaan Gas Negara (PGN), saying they are disrupting production, raising energy costs and putting manufacturing jobs at risk.
From Sept 1 to Sept 13, businesses only received around 80% of their requirements, while supplies from Sept 14 through the end of the month were reduced to about 78% of contracted minimum volumes, according to the Natural Gas Users Industry Forum (FIPGB).
“The decline in natural gas supply has had a chain effect that is severely hurting industries,” FIPGB chairman Yustinus Gunawan said, as quoted by Kompas.
The government has issued Energy and Mineral Resources Ministerial Decree No. 281 K/2026, adjusting the recipients and allocated volumes under the Specific Natural Gas Price (HGBT) scheme for certain industries to ensure that PGN supplies 100 of the agreed volumes with the low price between US$7 per million British thermal units (MMBtu).
However, Yustinus said industries were still receiving less than their allocated volumes. The shortfall is raising energy costs, as gas consumed beyond HGBT allocations can be charged at prices of up to US$15.6 per MMBtu.
Industries have also had to cover shortages with more expensive liquefied natural gas, adding to cost pressures amid a weaker rupiah, he noted.
The restrictions have also disrupted production, with some FIPGB members reducing smelting activity, shutting production lines and furloughing workers.
Glass, ceramic and silicate producers face particular difficulties as their furnaces must operate continuously and sudden shutdowns can damage production assets.
“If there is no improvement in industrial gas supplies by the end of September, layoffs could become a threat and are already looming,” Yustinus said.
Indonesian Ceramic Industry Association (Asaki) chairman Edy Suyanto said several companies had reduced production capacity by 40% to 50% because of gas shortages, as it is essential for ceramic manufacturing, particularly for spray dryers and kilns.
“For the ceramic industry, gas is the lifeblood. The survival of the ceramic industry depends heavily on the availability and reliability of gas supplies,” Edy said.
He also acknowledged that from Sept 14 to the end of the month, several gas users faced daily quota restrictions from PGN, with some Asaki members receiving only around 78% of their minimum volumes.
Asaki has received reports that around five to six companies have reduced production capacity as a result, Edy said.
A 40% to 50% reduction in capacity could force companies to lay off or furlough workers, he added. A partial shutdown is scheduled for Sept 26 to Sept 27, pending approval from upstream oil and gas regulator SKK Migas.
Further partial shutdowns are planned for Oct 1 to Oct 14. — The Jakarta Post/ANN
