Gov’t Seeks to Provide Lower Gas Price to 430 Companies

Minister of Industry delivers an online press conference, Wednesday (18/3). Photo by: PR/Agung

Presidential Regulation Number 40 of 2016 stipulates that eight industrial sectors are entitled to new gas price, according to Minister of Industry Agus Gumiwang Kartasasmita.

According to the Minister, Ministry of Industry has proposed 88 companies to be entitled to the gas price of US$ 6 per mmbtu.

“Since then, only eight companies have been entitled to get the new price. Ministry of Industry has proposed the addition of around 430 companies or industries that are stipulated in Presidential Regulation Number 40,” the Minister said in an online press conference, Wednesday (18/3).

Agus added that Ministry of Industry has also proposed additional 325 companies or industries whose sectors are not yet included in the Presidential Regulation, including paper industry, tire industry and others.

In principle, the Minister added, the President has agreed to approve the proposal.

Agus also said that the estimation of the need for gas in 2020 is 2,400 mmscfd (million metric standard cubic feet per day), 2,600 mmscfd in 2021 and 3,600 mmscfd in 2024.

“We got information that our domestic gas production is 7,000 (mmscfd). It means that the need for industrial gas in 2020 is only one third of the national gas production,” the Minister said.

Agus went on to say that the President has instructed relevant stakeholders to explore the third option, which is related to gas import to boost competitiveness in domestic market.

“Of course we will weigh the option. During the Cabinet meeting, Coordinating Minister for Economic Affairs has proposed to immediately implement the option in the island of Sumatra because the island has the infrastructure related to the FSRU (Floating Storage Regasification Unit), namely in the provinces of Aceh and Lampung,” he said.

Agus further said that the Government will step up efforts to build infrastructure, including by partnering the private sector so that the price of industrial gas can be lowered to US$ 6.

Minister of Industry also said that the President has ordered continuous evaluation and review to the policy.

“This is an effort from the Government to ensure that the industrial gas policy is well targeted so that the gas price of US$6 can improve the industry, provide added value to the industry, and increase utilization,” he said.

In addition, Agus also said that in the medium term the policy is expected to attract more investment and create more jobs in the country.

“We will draft Regulation of Minister of Industry for this policy. The policy will be implemented on 1 April and is expected to take our industries to the next level,” the Minister concluded. (TGH/EN)

Translated by: Ridwan Ibadurrohman
Reviewed by: M. Ersan Pamungkas