Industry Urges Certainty Of Gas Supply, HGBT Is Considered To Support National Competitiveness

Illustration. (Photo: Doc. Antara)

JAKARTA - The industrial world criticizes national energy policies, especially regarding gas supply restrictions and surcharges if they exceed the quota. In fact, the industry needs certainty of the sustainability of Certain Natural Gas Prices (HGBT) in order to be able to survive and compete in the midst of global pressures.

In this regard, the Expert Staff of the Minister of Industry for Strengthening Domestic Industry Ability for the period 2021-2024, Ignatius Warsito emphasized that the HGBT which was running in 2020 from the start was intended to strengthen industrial resilience. According to him, this policy should not be stopped just because there are supply constraints.

The RPP (Government Regulation) of Natural Gas for domestic needs is important to be strengthened by the global situation, the US-Chingkok trade war and conflicts in the Middle East which make energy prices and raw materials increasingly determine the resilience and competitiveness of domestic industries," said Warsito, in his statement, Tuesday, August 26.

He highlighted the need for policy alignment to really side with the industry. In addition, the criteria regarding who is entitled to receive HGBT cannot only be based on fiscal considerations or state revenues.

"But it also needs to be seen from the aspect of labor productivity, gas supply guarantees, reasonable gas prices, new renewable energy investments, modernization of technology and industrial downstream strategy," he said.

Even so, Warsito also reminded that cheap gas is not enough. Efforts are also needed to increase production utilization so that the use of cheap gas can be more optimal.

"This means that HGBT is not a single solution, but needs to be equipped with other industrial policies such as technology restructuring and efficiency improvement," he said.

On a different occasion, the former Director of State Gas Company (PGN), Michael Baskoro, strengthened the industry's view by emphasizing that the main problem lies in the supply side.

PGN only acts as a wholesaler, not a gas producer. So the root of the problem actually exists in domestic gas supply declining," he exclaimed.

Baskoro assessed that the decline in supply immediately hit the industry. He added, in the short term, LNG imports are the most realistic option to meet supply for industry.

"However, the price of LNG is quite expensive, it can reach USD 14-16 per MMBTU, depending on price-forming factors such as shipping, regasification, transportation and other costs," he explained.

Meanwhile, the Expert Staff of the Minister of Energy and Mineral Resources for Governance for Downstreaming 2020-2024, Musthofa explained the urgency that prioritizes domestic gas needs.

"The current problem is not the HGBT policy. The problem is the lack of supply because gas production is decreasing. The decline in gas production in the future is getting sharper," he explained.

He emphasized that solutions must be in favor of the national industry. One solution to this gas shortage problem, he said, could be overcome by changing the allocation of LNG for domestic use.

"However, it is not easy because it involves the problem of decreasing government revenues and existing export contracts. The solution can only be done by the government's high level," he said.

Musthofa also criticized distribution that was not in favor of industries in need.

"The excess gas in East Java can be used to cover needs in West Java. Don't use it for the Methanol project in East Java, this is a decision that needs to be reconsidered because the gas needs in West Java are large and gas supply from South Sumatra and West Java itself will decrease so that gas will be needed from East Java which will be channeled through gas pipelines built by the government," he concluded.

Meanwhile, the Chairman of the Indonesian Engineers Association Chemical Championship Agency (BKK PII), Sripeni Inten Cahyani, stated that as the home of Indonesian chemical engineers, his party supports the plan to downstream coal into methanol and continues to process it into DME (Dimethyl Eter).

"Currently, the government bears the burden of large imports of methanol, while Indonesian coal is abundant and downstream coal in front of the solution and the management of the program for increasing the significant added value of Indonesia's abundant natural resources," he concluded.