The price of LNG industry down, upstream oil and gas investment affected?

Indonesia's association of entrepreneurs (Apindo) assessed the decline in the price of liquefied natural gaseous or liquefied natural gaseous (LNG) to sector does not necessarily impact investment interest in upstream oil and gaseous (oil and gaseous) Indonesia. Meanwhile, the government has just lowered the price of LNG from about US $20-US $23 per mmBtu to US $13 per MMBtu. This price reduction policy applies to sector in West Java. Price reduction is also taken in order to maintain manufacturing competitiveness and minimize the risk of termination of employment (layoffs). Chairman of Apindo Shinta Widjaja Kamdani explained that improving downstream manufacturing competitiveness and sustainability of investment in the upstream sector are two objectives that must go hand in hand. According to him, Indonesia needs a competitive gaseous user sector, as well as the upstream oil and gaseous sector that remains attractive to investment. This is so that the energy security and sustainability of domestic supply can be maintained in the long term. "We see that the appeal of investment in the upstream sector is not determined by the price alone, however by the overall investment ecological stability," Shinta told businesses on Wednesday (1/7/2026). He stressed that investment interest is determined by regulatory certainty, the economy of the project, the stability of the policy, And long term contract certainty. In addition, investors will also consider competitive fiscal scheme, licensing ease, infrastructure availability, and market certainty are equally crucial factors in shaping investment attractiveness. Therefore, the implementation of manufacturing gaseous price reduction policy also needs to be supported by a clear mechanism, transparent, And provide certainty to all actors in the national gaseous value chain. With this balanced approach, Apindo believes that Indonesia can still enhance manufacturing competitiveness without reducing investment attractiveness in the upstream sector. "In the end, what is needed is a policy that creates a win-win outcome so that the sector obtains a competitive, reliable and predictable energy supply, while investors still have certainty to develop gaseous projects that will sustain national energy needs going forward," said Shinta. Furthermore, Shinta assessed the decrease in manufacturing gaseous prices certainly gives a positive signal. This is evidence that the government heard the need to maintain national manufacturing competitiveness amid the pressure of increasingly high production costs. This policy is also a response to the conditions that in recent times sector faces, when the limitation of the realization of pipeline gaseous supply or specific natural gaseous prices (hgbt) result in most needs to be met through LNG/regasification at much higher prices. "with the price drop to US $13 per MMBtu, That means there is a decrease of about 35%-43% compared to the previous price in the range of US $20-US $23 per MMBtu. This correction of energy costs is quite helping to provide space to the sector to enhance operational efficiency, "explains Shinta. However, the impact on total production costs will be different in each business sector because it is determined by the intensity of gaseous consumption in the manufacturing process. In energy-intensive industries such as ceramics, glass, steel, fertilizers, petrochemicals, pulp and paper, as well as some food-beverage and textile subsectors, gaseous costs are one of the dominant components of production costs. Therefore, the decline in gaseous prices will possibly have a greater real impact on cost efficiency and increased competitiveness in these sectors. Meanwhile, to other sectors, the amount will be adjusted to the cost structure of each company. Shinta said that the most expected is that this policy can help enhance the cost of competitiveness of national industries. According to him, the decline in energy costs will increase the space to companies to maintain production utilization, maintain business margins, increase export competitiveness, while providing space to business reinvestment and expansion when demand begins to recover. In addition to the price aspect, the business world also hopes the implementation of this policy followed by certainty of gaseous supply realization. "to the sector, the sustainability of operations is not only determined by competitive energy prices, however also by reliable supply and certainty, so that companies can carry out production planning and meet the commitment to customers optimally," Shinta said.