Erick Thohir: Indonesia Needs 8 To 10 Coal Downstream Plants To Press LPG Subsidy

Minister of SOEs, Erick Thohir. (Photo: Doc. Ministry of SOEs)

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir noted that at least Indonesia needs 8 to 10 factories to downstream coal into dimethyl ether (DME) to escape imports and LPG subsidies.

As is known, Indonesia still provides LPG subsidies of IDR 70 trillion every year. In fact, President Joko Widodo (Jokowi) has highlighted the magnitude of the budget issued.

Currently, Indonesia has just started building one DME factory through a collaboration between PT Bukit Asam Tbk (PTBA), PT Pertamina (Persero), and Air Products. This factory is located in Muara Enim, South Sumatra and was inaugurated by President Joko Widodo (Jokowi) in January 2022.

"One DME plant can save IDR 7 trillion. This means that we need 8 to 10 coal gasification plants for DME," he said at the CNBC Indonesia Economic Outlook, Tuesday, March 22.

Therefore, Erick said that private support is needed to encourage the construction and development of coal gasification plants in Indonesia.

Furthermore, Erick explained that this collaboration was needed to accelerate the downstream coal production into DME. So, by doing so, it can release Indonesia's dependence on LPG imports.

"Not only SOEs, we hope that several private coal companies can switch DME so that we can reduce our dependence on LPG with other countries," he said.

For your information, combustion using dimethyl ether (DME) is considered to be better and more efficient than Liquified Petroleum Gas (LPG).

Minister of Energy and Mineral Resources Arifin Tasrif believes that DME is worthy of being an alternative fuel for energy subsidy programs in Indonesia.