Raising Gas Prices, Government Still Considers Industrial Consumer Affordability

Illustration. (Photo: Doc. Antara)

JAKARTA - The Ministry of Energy for Mineral Resources (ESDM) revealed the reasons for the increase in natural gas prices sold to a number of industries that received a maximum incentive of 6 US dollars per MMBTU.

Director General of Oil and Gas Tutuka Ariadji revealed that the increase in gas prices for industrial groups that received incentives for Certain Natural Gas Prices (HGBT) was caused by the upstream side factor which experienced an increase in operating costs.

"Each field (oil and gas) is in a field that is getting older, the cost is greater," said Tutuka, quoted on Thursday, June 15.

Tutuka revealed, due to the increase in operating costs, the government could not cut even more from the upstream side.

"If it's a big cost, we can't cut it too much. Roughly speaking, for example, 6 dollars is 4 for upstream. Now upstream costs, for example, it's 5," he said.

According to Tutuka, the government is careful in making decisions on gas price increases for the industrial sector, taking into account the benefits of natural gas producers or Cooperation Contractors (KKKS) and industrial capabilities.

"We haven't combed it one by one, be careful so that the cost is reduced does not reduce the acceptance of KKKS so that prices are still the least reached," he explained.

As is known, the Minister of Energy for Mineral Resources (ESDM) issued Decree of the Minister of Energy and Mineral Resources No.91.K/MG.01/MEM.M/2023 concerning Certain Natural Gas Users and Certain Natural Gas Prices in the Industrial Sector which is valid from the date of stipulation, 19 May 2023.

Due to the issuance of the legal umbrella, the price of gas at the end of the pipe (plant gate) of several industries has increased compared to the previous price.