JAKARTA. The government finally reduced the price of gas for industry. According to Minister of Energy and Mineral Resources Regulation No 40/2016 on the Gas Price for Certain Industries, prices of gas for fertilizer, petro chemical, and steel industries will be reduced on 1 January 2017.
The tariff for transporting gas through pipe lines (toll fee) in certain lanes will also be reduced. However, the reduction of the gas price, as well as the toll fee will only affect to companies with gas as the raw material.
The regulation, which was signed by the Minister of Energy and Mineral Resources Ignasius Jonan is also different with the Presidential Regulation No 40/2016 on the Price of Natural Gas, which was signed in May 2016. Seven industries are supposed to enjoy the reduction of gas price, including fertilizer, petro chemical, steel, glass, glove, and oleo chemical industries.
In average, the prices are reduced to US$ 1.5 per mmbtu. The policy does not meet the expectation of the three industries, which receive the gas price reduction. For an example, JOB PHE-Talisman sell the gas to Pupuk Sriwidjaja at the price of above US$ 6 per mmbtu. The price of the gas for industry has declined from US$ 6.56 per mmbtu to US$ 6.48 per mmbtu.
According to the Production Director of PT Pupuk Kujang Maryono said that with the gas price of US$ 6 per mmbtu, the local fertilizer producers are unlikely to be competitive against the foreign producers. “We expect the price at US$ 4 per mmbtu,” he told KONTAN, Monday (5/12). The realization of the gas price for fertilizer industry is not much different with the prices of gas, which spent by Pupuk Kujang.
Director General of Oil and Natural Gas at the Ministry of Energy and Mineral Resources IGN Wiratmaja Puja said that the price of gas for the three industries were supposed to be estimated based on the price formulation. However, the standard of gas price refers to the floor price, due to the low prices of the three industries’ products.
Wiratmaja said that aside of Ministry of Energy and Mineral Resources, the contractors also bear the burden of the price reduction.
However, the price reduction does not meet the expectations of the entrepreneurs. Whereas, since the beginning of 2016 the government has promised to reduce the gas price to boost the competitiveness of local industries.
The Minister of Energy and Mineral Resources’ policy is also different with the Presidential Regulation No 40/2016. “The gas price reduction for the other sectors has to be realized this year. Minister of ESDM (Energy and Mineral Resources) has to comply with the regulation,” said the General Chairman of the Association of Glass Sheet and Safety (AKLP) Yustinus Gunawan, Monday (5/12).
(Muhammad Farid/Translator)
