Association Of Natural Gas Companies Requests HGBT Policy To Be Evaluated

Illustration. (Photo: Doc. Antara)

JAKARTA - The Indonesian Natural Gas Company Association (IPGI) has asked for the policy of Certain Natural Gas Prices (HGBT) which its discourse will continue after ending in 2024, to be evaluated.

The general chairman of IPGI, Eddy Asmanto, in a statement in Jakarta, Monday, June 10, said that the evaluation of the HGBT policy was very necessary because it had a broad impact on the entire natural gas supply chain, both from the upstream, midstream, and downstream sectors.

"It is necessary to evaluate the effectiveness of HGBT so that the benefits received by upstream, midstream and downstream sector business actors become fair. Moreover, HGBT was originally to encourage competitiveness in 7 industrial sectors," said Eddy, quoted from Antara.

IPGI has held an audience with Commission VII of the House of Representatives (DPR) of the Republic of Indonesia (RI) on June 4, 2024 at Nusantara I Building, Senayan, Jakarta. The audience aims to address the HGBT policy whose discourse will continue after ending in 2024.

Eddy added that HGBT has an impact on reducing state revenues in the upstream sector which is expected to increase the income earned by countries in the downstream sector, such as increasing tax revenue, increasing labor absorption, and increasing industrial competitiveness through price reduction.

"For information, in 2021 and 2022 countries experienced a decrease in revenue from the HGBT provisions of Rp29.39 trillion, but there is no quantitative data that describes an increase in the downstream sector. If the HGBT policy continues, IPGI expects a comprehensive evaluation," said Eddy.

Eddy's intention for a thorough evaluation includes fairness (fair) towards all relevant stakeholders in the upstream, midstream, downstream, and industrial sectors as users of the end of natural gas.

From the hearing held between IPGI and Commission VII of the DPR, he said there was an equivalence in perception that it was necessary to evaluate the policies of HGBT and DPR which were very concerned with all the problems raised.

In addition, the DPR will follow up on IPGI's aspirations with related partners and if needed, a Panja HGBT will be formed.

Certain Earth Gas Price Policies of US$6 per MMBTU have been specifically enforced by the government since 2020, for 7 industrial groups, namely the fertilizer, petrochemical, oleochemical, steel, ceramics, glass glasses, and rubber gloves industries.

Based on the Decree of the Minister of Energy and Mineral Resources of the Republic of Indonesia Number 91.K/MG.01/MEM.M/2023 concerning Certain Natural Gas Users and Certain Natural Gas Prices in the Industrial Sector, HGBT will end on December 31, 2024.

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif last May stated that the HGBT policy or low gas prices below 6 US dollars per MMBTU for seven industrial groups will continue.