Ministry Of Energy And Mineral Resources Affirms Government Evaluation Of HGBT Recipients

Director General of Oil and Gas of the Ministry of Energy and Mineral Resources Tutuka Ariadji. (Photo: Maria Trisnawati / VOI)

JAKARTA - The government through the Ministry of Energy and Mineral Resources (ESDM), the Ministry of Finance, the Ministry of Industry, SKK Migas, and the Aceh Oil and Gas Management Agency (BPMA) continues to evaluate the industry receiving certain Natural Gas Prices (HGBT).

The HGBT policy of US$6 per MMBTU to the seven industries imposed by the government since 2020 is a form of government support in supporting economic growth and increasing national industrial competitiveness, both in terms of taxation and employment. "In accordance with Presidential Decree number 121 of 2020 article 9, the Minister of Energy and Mineral Resources is mandated to evaluate the determination of HGBT and Certain Natural Gas Users who obtain HGBT facilities, every year or at any time taking into account domestic economic conditions," said Director General of Oil and Gas at the Ministry of Energy and Mineral Resources Tutuka Ariadji quoted Thursday, April 4.

Tutuka said that in the implementation of the evaluation related to the implementation of the determination of Certain Natural Gas Users and HGBT according to their authority, the Director General of Electricity, Head of BPH Migas, Head of SKK Migas or Head of BPMA, Ministry of Industry and Ministry of Finance.

"Each one conveys the results of their respective evaluations to the Coordination Team chaired by the Director General of Oil and Gas," added Tutuka. Tutuka continued, the Ministry of Industry and the Directorate General of Electricity have evaluated the implementation of the HGBT policy on the Certain Earth Gas Users industry which has received the determination of HGBT and the field of electricity supply for the public interest. "The Ministry of Industry has submitted data on the evaluation of the implementation of the HGBT policy through the Letter of the Director General of IKFT Number B/471/IKFT/IND/VIII/2021 dated August 16, 2023, but has not yet been accompanied by the results of the multiplier effect evaluation (quantized added value) of each Certain Earth Gas User industry that has obtained HGBT determination. The Director General of Electricity has submitted an evaluation of the implementation of HGBT in the field of electricity supply for general interest through letter Number B-2506/TL.04/DJL.3/2023 dated August 11, 2023, but has not yet been accompanied by the results of the evaluation of its implications related to tax revenues," explained Tutuka. Tutuka revealed, in the realization of absorption by Certain Natural Gas Users for the Pupuk Industry, which has not been optimal as in the fertilizer sector.

"In the last five years there has been a tendency to decrease the volume of HGBT realization for the industry, although it is not very large. The lack of optimal volume absorption by certain Natural Gas Users, especially the Pupuk Industry Sector, is partly due, firstly due to maintenance and factory operation constraints, secondly due to limited upstream oil and gas supply capability managed by SKK Migas in this case and maintenance on the Hulu side and the third applicable Kepmen 91," said Tutuka., Tutuka explained, in the future the fertilizer industry will need a large gas requirement, which of course needs to be prepared.

"Seeing the projected gas demand for fertilizer issued by the PT Pupuk Indonesia Group, there will be an increase in the need for PT Pupuk Indonesia from 820 MMSCFD to around 1,076 MMSCFD per day by 2030, this requires coordination and seriousness of all parties in order to ensure the availability of gas needs by national gas producers," explained Tutuka.

In 2022, the total fertilizer subsidy will be IDR 27.55 trillion. This figure decreased 16.12 percent compared to 2019 or decreased 9.37 percent compared to 2020.

However, when compared to 2021, fertilizer subsidies in 2022 will increase by 2.77 percent. "Of the 7 sectors of the Certain Natural Gas User industry, the fertilizer industry is the industrial sector that uses the largest natural gas input (58.48 percent) in its production costs. The HGBT policy has proven to have a positive impact on increasing production, sales, taxes and in gas absorption," concluded Tutuka.