Ruth Dea Juwita, Jakarta – The domestic ceramic industry has urged the government to implement a domestic market obligation for natural gas to safeguard the continuity of local producers output and improve competitiveness.
The push comes as manufacturers grapple with disruptions of gas supply, soaring energy prices and mounting global trade pressures since earlier this year.
Prioritizing gas for domestic manufacturers would help ensure more reliable supply, reduce exposure to global price swings and support the sector's long-term growth, the Indonesian Ceramic Industry Association (Asaki) said.
"These supply disruptions have a direct impact on factory operations and industrial productivity," Asaki chairman Edy Suyanto said in a statement on Tuesday.
"Natural gas should be prioritized for domestic industries with significant multiplier effects."
Capacity utilization in the first quarter stood at 70-72 percent, below its 80 percent target and slightly lower than the 73 percent recorded in 2025, the group said.
Asaki also flagged declining industrial gas allocation (AGIT) in West and East Java, where key industrial hubs are located, alongside rising surcharges as major concerns. The disruptions on gas supply in both regions have even forced some plants to scale back operations and halt production, according to the association.
In West Java, AGIT averaged about 67 percent in 2025, down from roughly 79 percent in 2024, and fell further to 49 percent in February 2026. East Java showed a similar trend, with AGIT at around 51 percent in February.
Gas prices have risen to about US$10-$10.5 per million British thermal units (mmbtu) in West Java and to around $8 per mmbtu in East Java, lifting the share of energy costs in total production to 33-35 percent, from 25-27 percent when regulated pricing was introduced in 2021.
The increase is also tied to broader energy market volatility, as a surge in global oil prices have triggered price spikes for gas and fuel costs.
A weaker rupiah also compounded the pressure on manufacturers, as gas transactions are denominated in US dollars, raising input costs. The currency has weakened to near Rp 17,000 per dollar from around Rp 16,800 on Feb. 28 amid heightened global volatility.
Costs for energy, fertilizers and petrochemicals are soaring as the world loses as much as 20 million barrels of oil per day from Middle East producers, with traffic through the Strait of Hormuz, a critical maritime shipping route for global oil supplies, effectively at a standstill as the United States-Israeli war against Iran enters its fifth week.
Brent Crude has risen more than 40 percent since late February, driving knock-on increases in gas and jet fuel prices, although it fell about 5 percent to around $99 a barrel on Wednesday on expectations of a potential ceasefire.
Asaki also warned of intensifying competition from imports, particularly from China and India, as shifts in Middle Eastern markets redirect exports, "with products from those countries seen as more competitive due to lower production costs."
"National ceramic industry competitiveness is increasingly under pressure, especially if accompanied by unfair trade practices," Edy said.
Source: https://asianews.network/indonesian-ceramic-makers-demand-priority-access-to-natural-gas-supply