East Java industry groups warn of gas supply crisis as PGN cuts deliveries
Tuesday, January 20 2026 - 08:53 AM WIB
Industry groups in East Java are warning of a looming gas supply crisis after state gas distributor PT Perusahaan Gas Negara Tbk (PGN) (IDX: PGAS) cut industrial gas allocations to well below normal demand.
Based on notices received in January, PGN has limited gas supplies to around 43%–68% of contracted volumes, with some users receiving less than 50% and only on certain days. The restrictions primarily affect industries covered under the government’s regulated gas pricing scheme, according to industry representatives as quoted by local media.
The Indonesian Natural Gas User Industries Forum said the reductions contradict official allocations set under an energy ministry decree and have created uncertainty for production planning.
“This situation directly suppresses factory utilisation, raises costs and weakens industrial competitiveness,” said forum chairman Yustinus Gunawan, adding that gas allocations for February have yet to be announced, raising concerns of further supply disruptions.
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East Java is one of Indonesia’s main industrial centres, hosting petrochemical, fertiliser, food and beverage, glass, ceramics and metal industries. Prolonged gas shortages could have wider economic repercussions, including for exports, employment and price stability, industry groups said.
The Indonesian Glass Manufacturers Association said its members in East Java were forced to scale back operations, with some receiving no gas supplies in mid-January and limited volumes thereafter.
Meanwhile, the Indonesian Ceramic Industry Association said gas shortages have undermined recovery plans for 2026, forcing capacity reductions and increasing the risk of imported products gaining market share.
Industry groups urged the government to review PGN’s gas distribution policy and ensure compliance with existing allocation rules, warning that energy uncertainty could hinder Indonesia’s economic growth targets.
Editing by Alexander Ginting