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View all search resultsPivoting from LPG to CNG to require 'billions of dollars’
As the government looks to replace millions of subsidized 3‑kilogram LPG cylinders with compressed natural gas (CNG) to reduce costly imports, experts warn the switch would require billions of dollars in investment, and a tight safety regime.
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A blue bajaj, running on compressed natural gas (CNG), passes on Dec. 20, 2023, through Jl. Kyai Haji Moh. Syafi'i Hadzami in South Jakarta. (JP/Nur Janti)
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s Indonesia looks to replace millions of subsidized 3‑kilogram LPG cylinders with compressed natural gas (CNG) to reduce costly imports, experts warn the switch would require billions of dollars in investment, and a tight safety regime.
The government is considering subsidizing CNG, which can be produced from abundant domestic feedstock, to offer households an alternative to LPG, for which the country relies on foreign suppliers.
Energy Minister Bahlil Lahadalia said after a meeting with President Prabowo Subianto on Tuesday that the CNG subsidy plan was still being worked out.
“The CNG [subsidy plan] is being reviewed. The price is much lower, approximately 30 percent [lower than LPG],” Bahlil said, as reported by Bisnis. “Why is it cheaper? Because the gas is available in our country, and the industry is also domestic. There is no need for imports; transportation costs are covered.”
Read also: Govt eyes natural gas as LPG alternative amid supply strains
CNG, a gas fuel made by compressing methane extracted from natural gas wells, can serve as a substitute to LPG, which consists of a mixture of propane and butane and is a by-product of natural gas processing and oil refining.
Indonesia has for years been looking for ways to reduce LPG imports, including by building vast gas networks in cities. Other efforts include turning coal into dimethyl ether (DME) through coal gasification.
