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View all search resultsRI turns to Africa, India for naphtha as Middle East supply tightens
Indonesia remains heavily dependent on imported naphtha, a key feedstock for plastic resins, with 70 percent of its supply coming from the Middle East.
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A worker shows shredded plastic bottle on Aug. 22, 2025, to be recycled at the Bali PET Recycle facility in Denpasar, Bali. (Antara/Fikri Yusuf)
G
overnment and industry players are scrambling to secure alternative supplies of naphtha, a key feedstock for the petrochemical sector used to produce plastics, as the United States-Israeli war with Iran has stifled shipping through the Strait of Hormuz. The disruption has triggered price spikes, forcing industries into “survival mode”.
Indonesia remains heavily dependent on imported naphtha, a petroleum byproduct used to produce ethylene and propylene, the main building blocks of plastic resins. Most of these imports come from the Middle East, as the country’s limited domestic refining capacity has constrained local supply.
The pressure is evident downstream, as plastic traders report price increases of Rp 5,000 to Rp 6,000 (US$0.29-$0.35) per pack, squeezing margins, particularly for small businesses.
The Indonesian Food and Beverage Producers Association (Gapmmi) also said packaging costs have surged by as much as 50 to 60 percent.
Fajar Budiono, secretary-general of the Indonesian Olefin, Aromatic and Plastic Industry Association (Inaplas), said around 70 percent of global naphtha supply is sourced from the Middle East, making the industry highly vulnerable to shocks in the region.
“The impact is clear. Naphtha is our main raw material, and about 70 percent of it comes from the Middle East. With the Strait of Hormuz closed, supply from the region has effectively stopped,” he said to The Jakarta Post on Tuesday.
Fajar said that attacks on refineries in the region have further curtailed production, while recovery could take time even if the conflict subsides.
