Bahlil Says Government Spends Rp70 Trillion On LPG Subsidy Per Year: We Encourage The Use Of DME

Illustration. (Photo: Doc. Antara)

JAKARTA - Investment Minister/Investment Coordinating Agency (BKPM) Bahlil Lahadalia said that the government spent a budget of Rp70 trillion for subsidized liquified petroleum gas (LPG) or LPG per year.

Bahlil said the price of LPG in the world market is US$850 per ton. Meanwhile, the market price is set at Rp5,300 per kilogram (Kg). Bahlil said, so far the government has imported 5.5 million to 6 million tons of LPG per year.

Furthermore, he said the government also spent around Rp12 trillion per 1 million tons to provide subsidies for the poor.

"If the time is 5.5 million tons, around Rp60 to Rp70 trillion will be used for LPG subsidies," he said at the 2022 Investment Outlook Economic Outlook event, Tuesday, November 23.

Because of the price comparison, said Bahlil, the Central government is planning to shift the use of LPG to Dimethyl Ether (DME). The transition will save state expenditures of Rp20 trillion per year. Meanwhile, DME is a product of downstream low-calorie coal to replace LPG.

"Our calculations are massive efficiency because the price of DME is not as high as LPG, which is 850 US dollars per tonne. The maximum is 650 to 700 US dollars per tonne. So we can achieve efficiency of Rp20 trillion per year from total imports (LPG)," he said.

For your information, the government continues to boost coal gasification projects into DME in order to reduce dependence on LPG imports. This was marked by the signing of an agreement between PT Pertamina (Persero) and Bukit Asam Tbk (PTBA) with an American company Air Products & Chemicals Inc (APCI).

SOE Minister Erick Thohir stated that the coal gasification was included in the national strategic project (PSN) to be carried out in Tanjung Enim for 20 years.

The investment value that will be disbursed from APCI is 2.1 billion dollars or equivalent to Rp30 trillion and with the utilization of 6 million tons of coal per year.

Erick said this project could produce 1.4 million DME per year and reduce LPG imports by 1 million tons per year and improve the trade balance.