The six-month emergency measure cuts the 5 percent tariff to zero, allowing refineries to substitute scarce naphtha for LPG as an alternative feedstock for plastic production.
Chief Economic Minister Airlangga Hartarto stated the incentive is an "intervention to lower import duties, primarily for the petrochemical industry which is struggling to obtain naphtha due to the conflict in the Strait of Hormuz."
This strategic pivot mirrors recent actions by major economies like India, aiming to stabilize production costs for industrial chemicals and packaging.
By securing cheaper raw materials, the government hopes to prevent a price surge in downstream consumer goods, such as food and beverage packaging, while the Ministry of Energy and Mineral Resources continues to explore for long-term alternatives to naptha.
The policy will take effect immediately following the issuance of the final ministerial regulations.
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Translator: Bayu Saputra, Aditya Eko Sigit Wicaksono
Editor: M Razi Rahman
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