The Ministry Of Industry Reveals The Reason Why Industrial Gas Prices Don't Need To Rise In October 2023

JAKARTA - The Ministry of Industry hopes that there will be no increase in the price of Certain Natural Gas (HGBT) worth US$6 per Million Metric British Thermal Units (MMBTU) for seven industrial sectors, which is planned for October 2023.

Plt. The Director General of Chemical, Pharmaceutical and Textile Industries (IKFT) of the Ministry of Industry, Ignatius Warsito, admitted that his party had communicated with various parties regarding the HGBT increase plan which was deemed unnecessary.

"We also understand in the last two years how we have struggled with this $6 gas program, right, to accelerate the utility of the seven sectors that have been implemented in accordance with Presidential Regulation (Perpres). We will continue to oversee, so that this (price increase) will not happen," Warsito said in a media briefing in Jakarta, Monday, August 28.

Warsito said that his party understands that the industrial sector has survived the COVID-19 pandemic and continues to take advantage of the USD 6 HGBT program.

Therefore, he said, the Ministry of Industry will continue to oversee the HGBT increase plan and hope that there will be no increase.

"The spike is indeed a big blow to the industry in our sector. If the price of 6 US dollars is not more than 10 percent, right, but from the total industrial sector which is not fair (fair) if the commercial rate jumps above 10 US dollars, many will shake, this needs to be held," said Warsito.

He added that there are a number of industrial sectors that object to the increase in certain natural gas prices, namely the fertilizer, petrochemical, rubber, and ethanol industries.

"So, don't jump right away. That's what becomes sensitive," said Warsito.

Furthermore, Warsito said he did not know the length of time to delay the increase in certain natural gas prices. However, he hopes that there will be no price increases.

"When asked how long, yes, we hope that doesn't happen. Well, we are still trying to optimize the HGBT allocation which has not been 100 percent," he concluded.

Previously reported, the Ministry of Industry (Kemenperin) said that the policy for Certain Natural Gas Prices (HGBT) intended for several sub-sectors of the manufacturing industry was still not optimal. This is because there are still a number of problems in its implementation

Meanwhile, industry players hope that HGBT can be implemented as well as possible to support competitiveness.

Some of the problems faced are that the implementation of the HGBT policy is that the natural gas price that must be paid by the recipient industry still exceeds the provisions.

More than 95 percent of companies designated as recipients of HGBT are based on the Decree of the Minister of Energy and Mineral Resources Number 91 of 2023 still receiving natural gas prices above 6 US dollars/MMBTU.

Then, the second problem is that the industry is experiencing certain natural gas supply restrictions. In 2022, there will be quota restrictions in East Java between 61-93 percent of contracts and the imposition of daily surcharge for excess usage of quotas set in almost all companies.

The third problem is that there are still many industries that have not received HGBT even though it has been recommended by the Minister of Industry (Menperin).

Throughout 2022, the Minister of Industry has recommended 140 industries to receive HGBT, but it has not been determined. In addition, there are also industries that have been designated as recipients of HGBT, but have not been given. For example, PT Pupuk Iskandar Muda 1 has not yet received HGBT for the supply of natural gas raw materials of 40 BBTUD.

"We have the principle of No one left behind. This means that there is not a single gas user industry, either as raw materials / auxiliary materials and energy that do not get gas of 6 US dollars per MMBTU and the supply is smooth according to the target," said Ministry of Industry spokesman Febri Hendri Antoni Arif, quoted Friday, August 4th.