Government Evaluates Cheap Gas Price Incentivities To Reduce State Burden

Illustration. (Photo: Doc. Directorate General of Oil and Gas)

JAKARTA - The Ministry of Mineral Resources Energy (ESDM) noted that the implementation of certain natural gas prices (HGBT) of USD 6 per MMBTU has an impact on losing state revenues of IDR 29.39 trillion.

Director General of Oil and Gas at the Directorate General of Oil and Gas Tutuka Ariadji said the loss of state revenue occurred in the upstream oil and gas sector due to natural gas price adjustments after calculating the distribution of oil and gas production between the government and contractors.

"Regarding the decline in state revenues for HGBT, their obligations to contractors amounted to 46.81 percent or 16.46 trillion in 2021 and 46.94 percent or Rp12.93 trillion in 2022," said Tutuka in a Hearing Meeting with Commission VII DPR, quoted Thursday, April 13.

According to him, in implementing the gas price incentive policy of 6 US dollars per MMBTU for the seven industrial sectors, the government can only sacrifice the state, while the portion of the contractor is fixed.

"The state's revenue has been reduced, otherwise the gas price could be more than 6 US dollars," said Tutuka.

Tutuka continued, the decline in state revenue also occurred in taxation from the gas price incentive recipient industry of 3 percent in 2021 compared to 2019.

According to Tutuka, due to the condition of the lost state revenue, the Ministry of Energy and Mineral Resources has submitted adjustments to state revenues for the implementation of HGBT. For this submission, the Minister of Finance has also responded to adjustments to state revenues in accordance with the adjustment of HGBT revenues.

Tutuka revealed that the incentive contained in Presidential Regulation 121 of 2020 aims to help industries that need to be assisted so that this cheap gas incentive is temporary. So that if there is an industry that has improved compared to before, it needs to be evaluated and replaced by a new industrial sector that is still weak.

The government will also evaluate the implementation of a certain gas price policy of 6 US dollars per MMBTU, as stated in the Ministerial Decree 134 of 2022.

The evaluation of low-cost gas price incentives must be in line with the increase in recipient industries, such as increasing labor absorption, factory utilization, to tax contributions to the state.

"So that there is a basis for evaluation, the name is Kepmen 134 and that is quite complete, there is savings productivity and so on," said Tutuka.