New Excise Regulations Overshadow Petrochemical Industry

Plastic and sugar-sweetened beverage excise policies will negatively affect the petrochemical industry in 2023. Secretary General of the Indonesian Olefin Aromatic and Plastic Industry Association (Inaplas) Fajar Budiono said the excise tax would threaten the petrochemical industry and increase product selling prices, potentially reducing demands. At the same time, the domestic market will be flooded with imported petrochemical products at lower prices.

"Imports will definitely leak through small ports because the entrance from outside the main port is wide open," Fajar said on Monday. He hopes that the excise taxes on plastics and sugar-sweetened beverages can be postponed so that demand for petrochemical products can still increase in 2023. Another threat to the petrochemical industry is increased crude oil prices. According to Fajar, global crude oil prices rose after the Russia-Ukraine war, which caused petrochemical raw materials to soar. When prices are high, demand from the user industry falters, causing the utilization of petrochemical plants to fall below 70 percent.