Boosting Industry Competitiveness, Govt Sets Industrial Gas USD6 per MMBTU

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

Number: 152.Pers/04/SJI/2020

Date: 14 April 2020

Boosting Industry Competitiveness, Govt Sets Industrial Gas USD6 per MMBTU

To help boost economic growth and increase competitiveness of national industry, Minister of EMR Arifin Tasrif signed Regulation of Minister of EMR No.8 of 2020 on Procedures to Determine Users and Certain Price of Natural Gas for Industry. The ministerial regulation results from the Limited Cabinet Meeting of 18 March 2020 which decided to adjust the gas price for certain industries including PLN to USD6 per MMBTU (Millions British Thermal Units).

According to Article 3 paragraph 1 of the regulation, gas price at user's delivery point (plant gate) is set at USD6 per MMBTU. This price applies for seven industrial groups, namely fertilizer, petrochemical, oleochemical, steel, ceramics, glass, and rubber gloves.

Head of Bureau of Communication, Public Information Services, and Cooperation of Ministry of EMR, Agung Pribadi, says the ministerial regulation had been coordinated with various relevant parties, including Ministry of Finance and Ministry of Industry.

"The ministerial regulation also controls the criteria of industries receiving certain price. Industries which have so far bought gas at a high price will get price cut towards or near USD6, depending on how much the upstream price and the transportation cost can be adjusted, but industries already buying gas below USD6 will still use the same price and there's no price increase," said Agung, Tuesday (14/4).

Agung says state revenue may be reduced due to this price adjustment for industries, while adjustment of transportation tariff will also help reduce gas price for industries.

According to Article 5 paragraph 2, in setting the certain gas price, Minister considers the recommendation on gas price adjustment from SKK Migas or BPMA and distribution tariff adjustment from the Regulating Agency.

Besides, Ministerial Regulation 8/2020 rules the obligations of gas distribution Business Entities to transport certain gas and the obligations of industries. "Industries that use gas must use the certain gas responsibly and must contribute to the state by obeying regulations, including paying taxes," Agung concluded. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi

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