Industry supports CNG transition, but warns Indonesia is not yet ready, survey finds

Indonesia's energy industry generally supports the government's plan to gradually reduce household LPG subsidies by promoting compressed natural gas (CNG) as an alternative fuel, although concerns remain over infrastructure readiness, public awareness, and implementation capacity, according to the latest survey conducted by Petromindo Survey following recent policy statements by Energy and Mineral Resources Minister Bahlil Lahadalia on the planned transition.

The survey was conducted from May 21 to June 15, 2026, shortly after Minister Bahlil announced the government's intention to gradually shift household cooking fuel consumption from subsidized LPG to CNG as part of efforts to reduce the state's subsidy burden, increase domestic natural gas utilization, and strengthen national energy security. The survey collected responses from professionals and decision makers across Indonesia's energy, oil and gas, power, infrastructure, and related industries to assess industry sentiment toward the proposed policy.

Overall, respondents expressed moderate support for reducing household LPG subsidies, with an average score of 3.38 on a five point scale. Support was even stronger for adopting CNG as an alternative household fuel, which received an average score of 3.80. Respondents identified reducing Indonesia's dependence on imported LPG as the primary driver behind the policy, followed by lowering the government's subsidy burden, improving subsidy targeting, increasing domestic gas utilization, and strengthening national energy security.

When comparing CNG with LPG, respondents viewed long term cost efficiency and environmental sustainability as CNG's strongest advantages, both receiving average scores of 3.89 out of five. Long term potential also received a relatively favorable assessment, although respondents remained more cautious regarding safety, distribution, and ease of use.

Among the key benefits expected from wider CNG adoption, 53.1% of respondents cited lower dependence on LPG imports, while 43.2% pointed to reduced government energy subsidies. Other perceived benefits included greater use of domestic natural gas resources, enhanced energy security, and potential long term savings for households. Despite this positive sentiment, respondents highlighted several major challenges that could hinder implementation. Insufficient public awareness and education emerged as the biggest concern, cited by 60.5% of respondents. Other significant issues include inadequate infrastructure readiness, safety and operational risks, regulatory uncertainty, and limited distribution networks.

The survey also indicates that Indonesia's readiness for a nationwide transition remains relatively low.

Respondents rated household preparedness at only 2.65 out of five, while the readiness of the broader industrial ecosystem scored 2.77, suggesting that significant work is still required before large scale implementation can be achieved. To improve the chances of success, respondents identified several priority areas requiring government attention. Safety standards ranked highest, followed closely by public education, distribution infrastructure, regulatory improvements, and ensuring competitive natural gas pricing.

When asked what policy support would be most critical, nearly seven out of ten respondents selected public awareness campaigns, while two thirds emphasized accelerating gas distribution infrastructure development. Regarding market rollout, respondents considered urban households and apartment buildings the most suitable initial target segments for pilot implementation before expanding into broader residential areas. Overall optimism toward the success of Indonesia's LPG to CNG transition remained moderate, with respondents giving the program an average optimism score of 3.37 out of five.

Read the survey finding: here.

About Petromindo Survey

Petromindo Survey provides customized market surveys, industry polls, perception studies, customer satisfaction research, and stakeholder assessments for the energy, mining, infrastructure, industrial, and business sectors. Leveraging Petromindo's extensive industry database and media ecosystem, Petromindo Survey helps companies, investors, government institutions, and associations gain actionable market intelligence to support strategic decision making, policy development, investment planning, and commercial growth.

For customized surveys, market research, or industry perception studies, contact the team at survey@petromindo.com.