Indonesia scraps import duties on LPG, plastic materials

Jakarta (ANTARA) - The Indonesian government has removed import duties on LPG for the petrochemical industry, plastic raw materials, and aircraft spare parts as part of its economic stimulus package for the second half of 2026.

Coordinating Minister for Economic Affairs Airlangga Hartarto said the tariff exemptions are aimed at reducing production costs and helping domestic industries secure alternative raw materials to replace naphtha amid global economic uncertainty.

"Following the President's directive, and in response to the current uncertainty, the government is providing incentives for imports of LPG and plastic raw materials," Airlangga said during a press conference here on Monday (June 22), adding that the government has set a zero percent of import duty on LPG imports for the petrochemical industry.

The policy is expected to generate economic benefits of up to Rp2.25 trillion (US$126.18 million) by lowering production costs in related sectors.

"With this policy, the zero percent import duty is expected to provide benefits worth IDR 2.25 trillion to the economic sector through cost reductions for related industries and the multiplier effect that can generate," he stated.

By dropping the LPG tariff from 5 percent to 0 percent, the government is helping petrochemical plants by allowing them to switch to a cheaper alternative fuel source.

In addition to LPG, the zero-percent import duty on plastic raw materials is expected to help stabilize domestic prices, as plastic remains the main packaging material for various food products.

The primary catalyst for the policy is the soaring price of naphtha, a petroleum derivative traditionally used to manufacture plastics, which has spiked due to escalating Middle East tensions.

"The government hopes that this zero percent import duty on plastic raw materials will also help curb inflation, especially since almost all food packaging uses in plastic,” Airlangga stated, noting that the policy will protect consumers while the government wait for the global situation.

Furthermore, the similar economic stimulus package also includes a full waiver of import duties on aircraft components.

Airlangga said the zero-percent import duty on aircraft spare parts is intended to support the domestic aviation industry and improve the global competitiveness of Indonesia’s maintenance, repair and operations (MRO) industry.

Related news: Ministry projects 3.88 million green jobs in Indonesia in 2026

Translator: Bayu Saputra, Yashinta Difa

Editor: Bayu Prasetyo

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