Government Prepares Incentives to Import Industrial Raw Materials from the Middle East

Audio BeritaPlease note that this article was automatically translated using Microsoft Azure AI, Open AI, and Google Translation AI. We cannot ensure that the entire content is translated accurately. If you spot any errors or inconsistencies, contact us atMinister of Industry Agus Gumiwang Kartasasmita when met by journalists during the Eid al-Fitr halalbihalal at the Ministry of Industry Office, Jakarta, Tuesday .for domestic industry from the Middle East.

She added that the Ministry of Industry continues to monitor the global geopolitical situation that is currently turbulent. The government needs to analyze and prepare policies to mitigate the impact on the domestic manufacturing sector. He explained that this industry requires around 3 million tons of naphtha. Currently, 100% of the domestic upstream chemical industry's naphtha needs are still being imported from countries in the Middle East region. Domestic oil companies produce naphtha, but not for industrial supply. Naphtha in the country is used to be processed into subsidized fuel oil.Currently, Fajar explained that the upstream chemical industry is faced with various challenges.

This situation will cause an increase in production costs. For example, in February 2024, when there was tension in the Suez Canal, the delivery of goods was delayed for two weeks from the schedule. Shipping costs also increased by 20-40 US dollars per ton, more expensive than in normal conditions. Fajar explained that the United States supplies LPG which can be processed into raw materials for the petrochemical industry. In Indonesia, all plants still use naphtha as a raw material for production. However, plant engines in Indonesia can be modified to accommodate at least 30 percent of LPG to be processed into petrochemical production raw materials.

Inflation is projected to be between 1.5-3.5 percent throughout 2024. The condition of rising import commodity prices will provide a negative sentiment in terms of inflation."Maintaining market psychology like this is very much needed to maintain economic stability," said Ajib.The atmosphere at PT Valuta Artha Mas foreign exchange center in Jakarta was busy on Tuesday .

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