Indonesia Cuts LPG and Plastic Raw Material Import Duties to Zero

Indonesia has waived import duties on liquefied petroleum gas (LPG) for the petrochemical industry and on plastic raw materials, implementing this as part of its economic stimulus for the second half of 2026. Coordinating Minister for Economic Affairs Airlangga Hartarto announced the policy, stating its purpose is to lower production costs and assist industry players in sourcing alternative materials like LPG, especially with global uncertainties and rising naphtha prices impacting the plastics sector. The government anticipates this measure will provide economic benefits totaling Rp2.25 trillion through cost reductions and a multiplier effect. The LPG import duty has been reduced from 5 percent to 0 percent to help stabilize prices, which have risen due to Middle East conflict. Similarly, the zero import duty on plastic raw materials is intended to maintain price stability for essential food packaging. The stimulus package also includes waiving import duties on aircraft spare parts to support the aviation and MRO industries. This initiative aims to enhance the competitiveness of Indonesia's MRO sector.

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Based on the President's directive, given the uncertain situation, the government is providing incentives for imports of LPG and plastic raw materials. The government has set a 0 percent import duty on LPG imports for the petrochemical industry