The Government of Indonesia has decided to make exports of naphtha and its condensate more stringent in order to safeguard the domestic upstream petrochemical industry.
While naphtha is utilized as a feedstock for ethylene and propylene production, condensate is used as a feedstock for manufacturing aromatic petrochemicals like benzene and paraxylene.
To ensure a sufficient domestic supply in the country, the industry ministry will soon introduce the rule of Domestic Market Obligation (DMO) for light and heavy producers of naphtha.
Indonesian Government is propelled to take such steps, as Chandra Asri, one of the largest petrochemical producers in Indonesia, requires 1.5 million tons per annum of naphtha which it imports from outside.
On the other hand, domestic producers like PT Pertamina and PT Trans Pacific Petrochemical Indotama in Tuban are forced to export most of its production to Chevron because of previous contracts.
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