Perusahaan Gas Negara: Thoughts on the new $13/mmbtu gas price cap

Research evidence excerpt

Perusahaan Gas Negara: Thoughts on the new $13/mmbtu gas price cap

J P M O R G A N Asia Pacific Equity Research

29 June 2026

Perusahaan Gas Negara Overweight

PGAS.JK, PGAS IJ

Thoughts on the new $13/mmbtu gas price cap Price (26 Jun 26):Rp1,520

Price Target (Dec-27):Rp2,150

The Minister of Energy and Mineral Resources has set a $13/mmbtu gas price cap Indonesia Utilities

ACfor domestic industries (news). This is below the $14/mmbtu level previously Arnanto Januri

flagged by the President’s Special Advisor on Employment and Worker’s Welfare, (622-1) 5291 8047

Said Iqbal (news). The policy likely aims to relieve margin pressure on domestic arnanto.januri@jpmorgan.com

industries and reduce the risk of mass layoffs. The new price regulation will affect PT J.P. Morgan Sekuritas Indonesia

PGAS’s average LNG selling price, which currently stands above $14/mmbtu, and Benny Kurniawan, CFA

will account for 20%/40% of the total gas volume in 2026/27, as per our estimates. (62-21) 5291 8024

benny.kurniawan@jpmorgan.com

We expect the LNG price decline to flow through via a combination of: 1) lower PT J.P. Morgan Sekuritas Indonesia

upstream prices, which effectively reduce PGAS’s purchase cost; and 2) lower gas

Alan Hon

distribution margins, which reduce the final ASP to end customers. Assuming (852) 2800-8573

PGAS absorbs half of the ASP cut (a 50/50 split between upstream and alan.hon@jpmorgan.com

downstream), we estimate 9%/22% downside to our 2026/27E EPS, all else being J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

equal. Each additional 10% increase in the margin burden implies an incremental Morgan Broking (Hong Kong) Limited

2%/4% downside to PGAS’s 2026/27E EPS, all else being the same.

• New US$13/mmbtu gas price cap for LNG. The Indonesian Parliament met