The Ministry Of Industry Strengthens The Downstreaming Of Petrochemical And Gas Industries

JAKARTA - The Ministry of Industry (Kemenperin) is committed to strengthening the downstream rate in the petrochemical and gas industries with various policy breakthroughs to help target 8 percent economic growth according to President Prabowo Subianto's wishes.

The Director General of Chemical, Pharmaceutical and Textile Industries (IKFT) of the Ministry of Industry, Taufiek Bawzier in Jakarta, Saturday, February 22, said this was done considering that the petrochemical and gas sectors had a large multiplier effect on other economic sectors.

"The IKFT sector must pump up additional GDP contributions of IDR 39.77 trillion with an industrial sector portion scenario of 18.9 percent of the national GDP. If the target of the industrial scenario contributes 21.9 percent of the national GDP, the IKFT sector must pump up additional donations of IDR 46.09 trillion," he said, quoted by Antara.

According to him, this technocratic calculation is taken from the initial calculation (baseline) of constant value in 2024 which is IDR 12,920 trillion.

So, with an 8 percent economic growth target, it is needed around Rp. 1,033 trillion which will strengthen the national GDP to Rp. 13,953 trillion.

"This means that with the two scenarios above the overall contribution of the national industrial sector, the figure must increase the portion of Rp195 trillion each, where industrial shares are 18.9 percent and Rp226 trillion if the national industry has a share of 21.9 percent," said Taufiek.

Furthermore, he said that from the IKFT sector in the first scenario, the chemical industry, chemical goods and pharmaceuticals, especially the role of petrochemicals and gas, must provide an additional value of at least IDR 18.37 trillion to IDR 21.28 trillion, and in 2024 the sub-sector will contribute IDR 555.40 trillion.

According to Taufiek, this can be achieved by integration of national policies that are pro-industrial in terms of import control, ease of investment upstream, intermediate and downstream industries, and subsidies of industrial gas through certain natural gas prices (HGBT).

Taufiek explained that for the performance of the petrochemical industry nationally, it has an olefin production capacity and derivatives of 9.7 million tons, aromatic products and derivatives of 4.6 million tons and C1 (metanol) products and derivatives of 980,000 tons.

He said that this production capability should be able to serve national needs, but in fact, the utilization is still not optimal and nationally imports of petrochemical products in 2023 reach 9.5 billion US dollars.

"This is where the importance of integrative policy instruments from the relevant Ministries is to encourage national production capabilities as well as provide confidence for investors who have built production facilities in Indonesia," he said.

Meanwhile, investment opportunities in this sector are very large, for example, methanol, national needs are 1.6 million tons, but only 721,424 tons are able to produce.

This needs to be directed at new investments in industrial trees that have been made by the Ministry of Industry, including industrial trees from petroleum, gas and coal.

"We have made a derivative of the product and its added value along with domestic supplies and demand," said Taufiek.