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LPG Subsidy Reduction by Downstreaming Coal into DME

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President Joko Widodo inaugurated the groundbreaking of coal downstreaming into dimethyl ether (DME) at Tanjung Enim Industrial Area in South Sumatera on Monday (24/1). The coal gasification is the result of the cooperation among PT Pertamina (Persero), PT Bukit Asam, and Air Products and Chemicals Inc.

In his remarks, the President said that through this project, Indonesia will reduce dependence on LPG import. He also remarked that until now LPG imports by Indonesia reaches Rp 80 trillion annually. Moreover, the government must subsidy LPG from Rp 60 trillion to Rp 70 trillion per year to make it affordable. Head of state believed that if coal gasification can operate, Indonesia may save Rp 7 trillion every year.

President Joko Widodo further affirmed that if Indonesia keeps importing LPG, only other countries will get the profit and new jobs. There will not be any investment so that jobs will not be created. Therefore, through this project, LPG import can be reduced. This will improve the current account balance that often experiences a deficit.

Meanwhile, Minister of Investment/Chairman of Indonesia Investment Coordinating Board, Bahlil Lahadalia in his written statement explained that the investment for this project came from the US Air Products and Chemicals, Inc (APCI) invested Rp 33 trillion. 

Director of PT Bukit Asam Business Development, Rafli Yandra said that this project will process 6 million ton of coal into 1.4 million ton of DME every year.

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