Government Cuts Asphalt Imports by 30 Percent, Rules to be Issued in Two Weeks

JAKARTA - The government targets the completion of the draft ministerial regulation (Permen) regarding the use of processed Buton Asphalt (Asbuton) in the next two weeks as a strategic step to reduce the dependence on imports of national asphalt.

Minister of Public Works (PU) Dody Hanggodo said that the use of Asbuton technically did not face significant obstacles, but still needed a legal umbrella so that implementation could run optimally and massively in the field.

"Technically it's not a big thing, but we still need a legal umbrella. Therefore, the preparation of this regulation was accelerated and targeted in the next 1-2 weeks to be completed so that we can immediately launch it," said Dody as quoted from an official statement, Monday, April 20.

He added that the initial stage of implementation would begin through the A30 scheme, namely the use of Asbuton at 30 percent in the asphalt mixture.

According to Dody, the scheme is considered ready to be implemented without major adjustments at the contractor level.

"We start from A30 because I believe this can be done immediately. Contractors will not have difficulty because the adjustment is not big. The important thing now is to ensure that there are regulations," he said.

The acceleration of regulation is part of the government's efforts to suppress the import of asphalt, which has so far dominated national needs.

The government targets a reduction in asphalt imports by at least 30 percent through increased use of Asbuton.

Currently, the use of Asbuton is still around 4 percent of the total national consumption of asphalt.

With this policy, the proportion of Asbuton use is targeted to increase to around 30 percent.

Meanwhile, the use of imported oil asphalt decreased from 78 percent to around 52 percent. The use of local oil asphalt is estimated to remain in the range of 18 percent.

From an economic perspective, the optimization of Asbuton is projected to save foreign exchange up to IDR 4.08 trillion per year and increase domestic tax revenue of around IDR 1.6 trillion per year.

The policy is also expected to provide a double effect on the economy of up to IDR 22.67 trillion and open up new employment opportunities through the development of the domestic Asbuton processing industry.

The draft regulation will regulate various aspects of implementation, ranging from the determination of target use on priority roads, procurement procedures including through e-catalogs, incentives for users of processed Asbuton to strengthening the supply chain and technical training for construction service providers.

In addition, the policy is also aimed at encouraging the fulfillment of the Indonesian National Standard (SNI) and increasing the Domestic Component Level (TKDN) to at least 40 percent to strengthen the domestic asbestos processing industry.

Through the acceleration of the preparation of the regulation, the Ministry of PU emphasized its commitment in encouraging the downstreaming of natural resources, strengthening the national construction industry, and realizing asphalt independence in accordance with the development targets in the 2026-2029 RPJMN.