Industrial Sector Uses Domestic Gas the Most in 2021

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 321.Pers/04/SJI/2021

Date: 10 September 2021

Industrial Sector Uses Domestic Gas the Most in 2021

The use of gas by domestic industries is on the increase. In fact, in 2021, the industrial sector consumes 1,597.44 Billion British Thermal Unit per Day (BBTUD), or 28.22% of the total national gas production.

To support the use of gas by industries, the government set out Presidential Regulation Number 40 of 2016 which contains the policy on gas price cap in an effort to help accelerate economic growth and increase the competitiveness of the national industries.

"The government is very serious about the gas price policy, especially for specific industries such as fertilizer, ceramic, etc. (The policy on) Gas pricing at USD6 per MMBTU has been adopted well," said Director General of Oil and Gas of the Ministry of Energy and Mineral Resources (EMR), Tutuka Ariadji, in Jakarta on Wednesday (8/9).

The government has also constructed gas infrastructure. In the eastern part of Indonesia, gas will replace diesel in electricity generation. Additionally, transmission pipelines are being laid, such as the 260 km Cirebon-Semarang (Cisem) line and the 360 km Dumai-Sei Mangke line. These pipelines will connect Sumatra and Java, and boost industrial growth in the regions.

"When the Dumai-Sei Mangke and the Cisem pipelines are complete, we can connect (gas) pipelines from North Sumatra to East Java. These will foster industrial growth in Sumatra and Java, and thus, promote the growth of the national economy," continued Tutuka.

Moreover, the government has issued a number of supporting regulations to spur domestic gas use. For example, Regulation of Minister of EMR Number 8 of 2020 stipulates that business entities that distribute natural gas to users may be given incentives proportionally. Next, Regulation of Minister of EMR Number 19 of 2021 cuts bureaucratic red tape and gives legal certainty to businesses while ensuring security of supply and offering opportunities in gas infrastructure business to business entities/investors.

After the industrial sector, the next largest consumers are the fertilizer industry which consumes 705.03 BBTUD or 12.45%, the electricity sector 681.50 BBTUD or 12.04%, and the domestic LNG use 504.51 BBTUD or 8.91%. (IY)

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