The Ministry Of Industry Is Worried That 134,794 People Can Be LAID Off Due To The Implementation Of HGBT Tightened

The Ministry of Industry (Kemenperin) is worried that a spike in layoffs will occur in the industrial sector due to the tightening of the application of Certain Natural Gas Prices (HGBT).

The Ministry of Industry noted that the total number of workers who depend on the sustainability of HGBT supply in the industrial sector reaches 134,794 people.

"This is a serious alarm. Every policy involving industrial gas supply must consider its implications for business continuity and the welfare of hundreds of thousands of families living from this sector," said Ministry of Industry spokesman Febri Hendri Antoni Arif as quoted from his written statement, Friday, August 15.

Febri admitted that his party received many letters and reports from the HGBT user industry which felt the impact of limiting gas purchase volume with HGBT to 48 percent from the previous 60 percent imposed by PT Perusahaan Gas Negara Tbk (PGN).

"In fact, HGBT is the President's decision which has determined both the price of 6.5 US dollars per MMBtu and the sustainability of its supply. No party or institution should try to subordinate to the President's order in the form of increasing prices above 6.5 US dollars and limiting its supply," he said.

Of the hundreds of thousands of people threatened with layoffs, the details are the fertilizer industry (10,420 workers); petrochemical industry (23,006 workers); the autochemical industry (12,288 workers); steel industry (31,434 workers); ceramic industry (43,058 workers); glass industry (12,928 workers); and the rubber gloves industry (1,660 workers)

The tightening of gas supply at special prices, according to Febri, will have a broad impact on the sustainability of the manufacturing industry. Supply disruption and high gas surcharge, such as the tariff imposed by PT PGN of 16.77 US dollars per MMBTU, burdening business actors, especially in the energy-intensive sector, such as the ceramics, glass, steel, fertilizers, petrochemicals and autochemicals industry.

"The increase in prices or reduced supply of HGBT will immediately erode profit margins, reduce factory utilization and in the long term suppress investor interest in investing in the manufacturing sector," said Febri.

Not only that, Febri also claims that several industrial sectors are currently also starting to show a decline in utilization due to gas supply constraints.

For example, the national ceramic industry, which in the first semester of 2025 was only able to reach the utilization rate of around 70-71 percent, although it had improved compared to the previous year.

"If the gas supply continues to be disrupted, this achievement can be eroded again, especially the fertilizer industry which will supply fertilizer needs in President Prabowo's food self-sufficiency program," he said.

He emphasized that the largest beneficiaries of the HGBT program so far have come from the BUMN sector, such as PLN and Pupuk Indonesia.

"On the other hand, private industrial companies that are the backbone of national manufacturing often receive different treatment. This creates unhealthy inequality and has the potential to disrupt the business climate," explained Febri.

The overall industrial gas demand is estimated to reach around 2,700 MMSCFD, while the available HGBT volume is only around 1,600 MMSCFD. Of these, said Febri, around 900 MMSCFD or 50 percent is allocated to SOEs.

"If the portion for the private industry gets smaller, the impact will be felt immediately on reducing production capacity, business efficiency and even potential mass layoffs," he explained.

Furthermore, the Ministry of Industry hopes that coordination across ministries and institutions can be carried out immediately to ensure the availability of fair and equitable HGBT. Febri also reminded that the manufacturing industry is the largest contributor to non-oil and gas GDP and has an important role in absorbing millions of workers.

"If the HGBT problem is not immediately resolved, the impact will not only be on the trade balance and investment, but also on the welfare of the community," he concluded.