PGN Ready to Implement Gas Price Policy to Strengthen Industry Competitiveness

Minister of Energy and Mineral Resources Bahlil Lahadalia/DOK Ministry of Energy and Mineral Resources

JAKARTA - PT Perusahaan Gas Negara (PGN) has expressed its readiness to implement the government's policy regarding national gas pricing governance to ensure the energy supply for the industrial sector remains reliable, safe, and sustainable.

As a Pertamina Gas Subholding, PGN supports the government's steps in presenting more competitive gas prices to maintain the competitiveness of the industry while strengthening national energy resilience.

PGN President Director Arief K. Risdianto said the company appreciated the policy set by the Ministry of Energy and Mineral Resources (ESDM) because it had considered the interests of all stakeholders fairly.

"PGN expresses its appreciation to the Government, especially the Ministry of Energy and Mineral Resources, for the establishment of a national gas price governance policy that has considered the interests of all stakeholders fairly," said Arief.

He emphasized that PGN is ready to carry out all the provisions that have been set by the government. The company will also continue to ensure that the supply of natural gas is maintained to support the sustainability of the national industry.

"We will continue to ensure that the supply of natural gas remains reliable, safe, and sustainable to support industrial competitiveness, strengthen national energy resilience, and provide benefits for the economy and society," said Arief.

PGN's support is in line with the government's steps in preparing a comprehensive policy to meet domestic natural gas needs at a more competitive price for the industrial sector. The policy aims to maintain a balance between the affordability of gas prices, supply certainty, sustainability of national natural gas management, and increased industry competitiveness which has an impact on economic growth and job creation.

Minister of Energy and Mineral Resources Bahlil Lahadalia said the policy was drafted after the government received various aspirations from industry players, including the ceramics sector and the Confederation of All Indonesian Workers' Unions (KSPSI).

"In the last 10 days, we have received aspirations from industry players associations from the ceramics sector and several other industries including from the Confederation of All Indonesian Workers' Unions (KSPSI). Based on good coordination with the leadership of the DPR and the Government, we have formulated several solutive steps to overcome the problems faced by industry friends," said Bahlil.

In the scheme set by the government, the price of certain natural gas (HGBT) remains at USD6.5 per MMBTU for raw materials and USD7 per MMBTU for fuel. Meanwhile, the price of non-HGBT pipeline gas in West Java is ensured not to increase and remains in the range of an average of USD9.6 per MMBTU.

As for non-HGBT LNG, the government decided to lower the selling price at the industrial customer level in West Java, Banten, and DKI Jakarta from around USD20.57 per MMBTU to USD13 per MMBTU.

According to Bahlil, the decision was a direct order from the President to maintain the sustainability of the industry while protecting jobs.

"Based on the President's direction, the President is very interested in maintaining the industry and jobs. The input from the industry is around USD15 to USD16 per MMBTU, but after the calculation was made and we reported to the President, the price of LNG was reduced to USD13 per MMBTU," he explained.

The price reduction is carried out through the optimization of cost structures and increased efficiency along the LNG supply chain, ranging from upstream gas prices, processing costs, to infrastructure and trading components. With this mechanism, the benefits of price adjustments are expected to be directly felt by industrial customers.

The government also emphasized that the use of LNG would be an important part of maintaining the continuity of the national natural gas supply, especially in areas that experience a decline in pipeline gas production. To ensure the implementation of the policy is effective, the Ministry of Energy and Mineral Resources will coordinate with SKK Migas, business entities, and all related stakeholders in arranging the allocation of supplies and implementing the price policy in the field.

"We believe that ensuring the sustainability of employment is part of the government's responsibility," said Bahlil.