Ministry Of Energy And Mineral Resources Opens The Possibility Of Adjusting Industry-Specific Gas Prices

JAKARTA - The government is evaluating the application of gas prices for 7 industrial groups of US$6 per MMBTU. Later the results of the process will be used as material for the next policy.

The Sub-Coordinator for the Preparation of the Oil and Gas Utilization Program at the Ministry of Energy and Mineral Resources, Syarifudin Setiawan, said that the government is currently focusing on evaluating the determination of the natural gas price of US$6 per MMBTU. From the evaluation results, it is possible that there will be an adjustment in gas prices.

"It could be that the end result is that the price readjustment, which is currently US$6 per MMBTU, could change, one of which is possible," said Syafrudin, in a discussion held by the Energy Room, Thursday, August 25.

Regarding the expansion of the industrial class that will receive an HGBT incentive of USD 6 per MMBTU, the Ministry of Energy and Mineral Resources is still waiting for a recommendation from the Ministry of Industry. Industries that wish to receive the recommendation must submit supporting data first.

"So it's kind of like running for office or proposing to accept this HGBT with supporting data, then he and he will evaluate it and if it is proposed, it is recommended to accept HGBT then it will be submitted to the Ministry of Energy and Mineral Resources," he said.

Energy Watch Executive Director Mamit Setiawan said that gas price determination must adhere to the principle of justice, by paying attention to the upstream to downstream sectors. He believes that HGBT should not be fixed forever at US$6 per MMBTU so that it can attract investment in natural gas network infrastructure development.

"If the price is pegged, the costs will also be limited, yes, while we know that the gas price is one of the keys to the energy transition when this infrastructure is not running. I am worried that what we aspire to is that we will achieve net zero emission in 2060 could be disrupted," said Mamit.

Mamit continued, regarding the expansion of the gas price incentive group to 13 industrial groups, the government should pay attention to the impact of the expansion so as not to increase the burden on the state because the industrial groups are unable to absorb the allocated gas.

"I think it is necessary to reconsider the pros and cons and the benefits, what the multiplier effect looks like before there is a discourse for expansion into additional industrial groups," he added.