President Jokowi Signs Presidential Regulation to Accelerate Natural Gas Supply and Distribution

President Jokowi Signs Presidential Regulation to Accelerate Natural Gas Supply and Distribution

In a bid to accelerate the implementation of energy diversification such as supply and distribution of compressed natural gas (BBG) for transportation, aside from the supply and distribution of fuel (BBM), President Joko ‘Jokowi’ Widodo on 2 November 2015 signed a Presidential Regulation No 125 of 2015 on the Amendment of Presidential Regulation No 64 of 2012 on Supply, Distribution and Pricing of Compressed Natural Gas for Transportation.

The Presidential Regulation says that gas supply and distribution as intended is allocated for motor vehicle for transportation using compressed natural gas (CNG).

The Regulation will be implemented gradually in the Unitary State of the Republic of Indonesia and promulgated by the Minister (Minister of Energy and Mineral Resources (ESDM), red).

According to the Presidential Regulation, BBG supply and distribution is performed by state-owned enterprise (BUMN) according to the Minister’s appointment. Besides state-owned enterprise (BUMN), the Minister also directly appoints business players to supply and distribute BBG in a form of CNG.

“Business players are obliged to meet these requirements, among others; a. having tools and facilities to supply and distribute BBG in a form of CNG; and b. having guarantee to supply BBG in a form of CNG,” Article 6 paragraph (3) of the Presidential Regulation says.

Meanwhile, BUMN and business players as intended are provided with allocation on gas for vehicle for transport by the Minister (Minister of Energy and Mineral Resources (ESDM), red).

Regarding the implementation of supply and distribution of BBG in a form of CNG as intended, it covers distribution tools and facilities and/or construction and operational of natural gas filling stations (SPBG).

“The cost to establish SPBG could be taken from the State Budget (APBN) and/or the budget from the appointed state-owned enterprise. The cost to build SPBG by business players sources from the budget of business players in which they directly appointed by the Minister,” Article 7 paragraph (3) of the Presidential Regulation No 125 of 2015 says.

In order to implement the acceleration of BBG supply and distribution in a form of CNG, the President, in this Presidential Regulation, instructs the ministers, Heads of non-Governmental Institution, governors, regents/mayors as accordance to their authorities to: a. accelerate the process on permits and land aqcuisition to build SPBG; b. stimulate CNG using for service vehicles and public transportation; and c. conduct dissemination on the use of CNG.

Meanwhile, the Minister of Energy and Mineral Resources has the task to set the CNG’s retail price.

Converter kit

Article 9 of the Presidential Regulation stipulates that the Government provides free converter kit for service vehicles and public transportation along with its installation gradually according to CNG supply and distribution areas.

“The free converter kit is only distributed once,” Article 9 paragraph (2) of Presidential Regulation No 125 of 2015 says.

Converter kit supply and installation as intended for service vehicle and public transportation is performed by state-owned enterprises according to the Minister’s assignment and the cost sources from the State Budget (APBN) and/or budget of business players in which they are directly appointed by the Minister.

Regarding converter kit supply and installation for service vehicle and public transportation which the cost sources from the State Budget (APBN), they can supply and install the converter kit on even year according to the prevailing laws and regulation.

Furthermore, the Minister who is in charge in governmental issue particularly on industry will regulate the technical requirements of converter kit circuit components.

“The Presidential Regulation shall take effect from the date of its promulgation,” Article 2 of the Presidential Regulation Number 125 of 2015 which is promulgated by Minister of Law and Human Rights Yasonna H. Laoly on 9 November 2015 says.(Pusdatin/ES) (RAS/EP/YM/Naster)