Mutual Cooperation to Build Jargas, Solution to Reduce Energy Subsidy Burden Through Optimization of Domestic Gas

PGN Supports National Energy Independence Through Mass Development of Household Gas Networks

Jakarta – PT PGN Tbk, as the Subholding Gas of Pertamina, continues to play a significant role in helping reduce the burden of energy subsidies and imports, through the massive development of household gas networks (jargas). This initiative aligns with Indonesia's target for energy self-sufficiency, making the country more independent in meeting its energy needs by utilizing domestic sources.

From the government’s perspective, jargas can help reduce subsidies and energy imports. It can also make energy subsidies more targeted, improve the national foreign exchange balance, support economic growth, and create job opportunities during the construction of jargas networks. For the community, jargas provides a practical, safe, and cost-efficient energy solution.

"Jargas can help reduce the imports that have been a burden," said Laode Sulaeman, Director of Oil and Gas Infrastructure Planning and Development at the Ministry of Energy and Mineral Resources (KESDM) during the Investortrust FGD Gotong Royong Membangun Jargas event, October 29, 2024.

At the same event, Gunawan Eko Movianto, Director of Synchronization of Regional Government Affairs I - Directorate General of Regional Development, Ministry of Home Affairs, expressed the ministry's support in bridging the interests of local governments with the development of jargas. "The Ministry of Home Affairs supports the development of jargas for energy self-sufficiency so that we can utilize domestic natural resources, working together with all stakeholders to ensure responsible execution," he said.

PGN welcomes the support from various stakeholders, which is expected to serve as a stimulus for further jargas development. The estimated reduction in LPG imports from the existing jargas management by PGN is currently 84,000 tons per year, resulting in a subsidy reduction of IDR 468 billion per year per 1 million household connections. These numbers are expected to grow as the development of jargas is accelerated by all related parties.

"Energy mix alignment in jargas areas with substitute fuels, particularly subsidized LPG, is needed for optimizing the jargas program and increasing customer interest," said Rosa Permata Sari, Director of Strategy and Business Development at PGN.

"For national interests, there is a commitment to a clean environment and saving foreign exchange; jargas is the solution. The commitment to building jargas is essential, and having a responsible energy management conscience is important for the people. Moreover, in the geopolitical context, when the Middle East is unstable, 50% of oil and gas supplies can be disrupted. Jargas will be one of the solutions to safeguard national energy resilience," added Komaidi Notonegoro, Executive Director of Reforminer Institute.

Public policy observer Agus Pambagio emphasized, "Do we want or not to reduce energy subsidies? Because the global situation is quite worrying. In terms of managing national energy resilience, whether we admit it or not, Indonesia relies heavily on imports. Now or never (build jargas)," he said.

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