To Make it More Competitive, Gov’t Allows Industries to Directly Import Gas

Cabinet Secretry Pramono Anung

In order to make domestic industries more competitive and promote ease of doing business, the Government will soon solve the matters relating to industrial gas price which have been complained by industrialists due to its high price.

Cabinet Secretary Pramono Anung said that, the limited meeting led by President Joko “Jokowi” Widodo on Tuesday (24/1), at the Presidential Office, Jakarta, concluded that the authority to decide gas price has been given to Minister of Energy and Mineral Resources (ESDM) because Indonesia’s gas price structure is fix and static, so when oil price rises, the price of gas will be higher as well.

“Currently, gas price in Indonesia is US$4 per mmbtu, but there was also time when the average price is US$6 per mmbtu. Therefore, the President has launched Presidential Regulation Number 40 of 2016 so that the price can be set under US$6, particularly for the sake of fertilizer and petrochemical industries, as well as other industries,” Pramono Anung told the reporters after a limited meeting on Tuesday (24/1).

Considering the Presidential Regulation that regulates the price of gas should be under US$6 per mmbtu, the industry is given the opportunity to directly import gas with lower price, Pramono explained.

According to Pramono, the policy in providing opportunity for industry to directly import gas was made because the price of gas in the Middle East declined significantly. “The average price of gas in the Middle East is US$3 to 3.5 per mmbtu, adding the transportation and other costs, the price in Indonesia is expected to be at US$4.5 (per mmbtu),” Pramono added.

However, Pramono reminded all not to use middle man in importing gas. Moreover, in order to control the gas price, only related industries can import it. “The Government allows the direct import, but there must be no middle man. If it can be well-implemented, we believe the price of gas will be lower,” Pramono said.

Previously, President Jokowi in his introductory remarks in a Limited Meeting on industrial gas reaffirmed his directives on the limited meeting last October, which stated, “Natural gas is not only a commodity, but also a development asset that can strengthen national industry and boost the competitiveness of Indonesia’s industrial products in the global market.”

Therefore, the President wants the price of gas to be calculated in order to bring concrete impacts, not only to increase the competitiveness of Indonesia’s products but also to bring added value to the development of downstream industries. (FID/DNA/ES) (RAS/MMB/YM/Naster)