JAKARTA - The government is advised to be more careful and cautious in providing gas price incentives as an impact of current geopolitics. Moreover, energy costs are not the only production component that can automatically strengthen or weaken the competitiveness of the industry.
"The components that make the company heavy today are not only energy. The exchange rate is also wrong. Also the potential market is getting weaker. Many factors," said economist and public policy expert UPN Veteran Jakarta, Achmad Nur Hidayat, to reporters, quoted Monday, June 29.
Not to mention, Achmad added, there are many national industries whose major raw materials are imports. In the current exchange rate of the rupiah against the dollar, this situation significantly increases production costs.
"I think the government should be careful. Look at the type of industry and whether it is growing or not. Because if you talk about operating costs, the increase in energy prices will increase operating costs. But the exchange rate of the rupiah is also weakening. There is no consequence of rising logistics costs, packaging costs, especially plastic, also increased," he explained.
Meanwhile, on the other hand, Achmad said, looking at the increase in world energy prices throughout this year, ideally all non-subsidized energy prices in Indonesia follow market prices.
"Once again, the government must be careful. If the increase in gas prices is still within a reasonable stage, it is necessary to increase the price of gas but there must also be other stimuli for companies that are in survival mode," he added.
Achmad reminded that companies in the industrial supply sector should not be harmed. There needs to be a balance between energy providers and users.
"If the energy provider suffers, the financial balance is not strong, then it can have an impact on not being able to provide energy again. This is also not allowed," he said.
On the other hand, he continued, the increase in energy prices including gas should make companies in the user industry think more creatively. "Do efficiency. Companies must become more efficient in this situation. This is a point that needs to be mentioned as well," he said.
In recent days, the issue of industrial gas prices has indeed returned to the public spotlight and is often directly associated with the weakening of industry competitiveness and the potential for job cuts (PHK) which number up to 55 thousand workers. In response to this, Presidential Special Advisor Said Iqbal revealed that the 55 thousand workers in circulation are not the actual number of layoffs.
"So, it is also not true that 55 thousand employees will be laid off. Indeed, there are thousands of people affected. If there is a granite company that does layoffs, the number is hundreds of people and it happens due to the impact of war and high fuel prices," he explained, this weekend.
Said explained that as a geopolitical impact, the increase in energy prices for industries including gas that are not subsidized is increasingly unavoidable. However, gas prices are not the only thing that makes the industry's burden heavy.
"Another factor is the weakening of people's purchasing power. As a result, purchases of goods decreased, production decreased, and the decline in production resulted in efficiency, which ultimately led to layoffs," he continued.
In addition, fluctuations in the rupiah exchange rate against the dollar are also a cause of the increase in production costs, especially for companies whose raw materials are imported.
"They buy raw materials using dollars, while the production results are sold in rupiah. This is very detrimental to the company."
From the perspective of industrial competitiveness, the ReforMiner Institute study explains that the competitiveness of the national industry is not determined by gas prices alone. It is determined by many factors including industry strategies, market demand, availability of raw materials, productivity, efficiency, exchange rates, technology, logistics, and market access.
"Gas prices are one component of cost competitiveness, but not the only determinant of competitiveness," said the Executive Director of the ReforMiner Institute, Komaidi Notonegoro, in his study, this weekend.
In terms of cost structure, the energy component is also not the largest factor in many industrial sectors. BPS data quoted by ReforMiner shows that the share of fuel, including gas, lubricants, and electricity in the input costs of the industrial sector is around 6.35 percent.
Meanwhile, the components of raw materials and auxiliaries can reach 64.60 percent to 96.76 percent, depending on the type of industry.
"This means that if the issues of raw materials, market demand, exchange rates, productivity, technology, and industry strategies are not addressed, then pressure on competitiveness will still emerge even though the energy burden has been mitigated," he explained.
Even so, Komaidi explained that gas prices remain a strategic component that needs to be managed, especially for industries that are highly dependent on gas supplies. However, making gas the sole scapegoat for all industry pressures, according to him, risks closing the space for more comprehensive and targeted solutions.
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