JAKARTA (TheInsiderStories) - Indonesia government will releases new ministerial decree on new gas price for several industries next week, following the Presidential Decree No. 40 of 2016 on Pricing of Natural Gas signed by President Joko Widodo dated May 3, 2016.
Minister for Energy & Resources Mineral Ignasius Jonan said, this regulation will be effective on January of 2017. According to him, government has decided to adjust the gas price for petrochemical, fertilizer and steel a maximum $6 per million british thermal units (MMBTU).
“For now only for three industries will get the benefit of gas price cutting at this moment,” Jonan told press after meeting at Coordinating Minister for Economic Affairs office.
The government will gradually cut gas price for several industries, including steel, oleochemical, petrochemical, rubber gloves, fertilizer, ceramic and glass.
Based on SKK Migas data, gas price for such industries still varies from $8-$14 per mmbtu, making the industries less competitive. government initiate such gas price cutting policy through third economy package policy last October.
The regulation set in order to encourage economic growth and improving the competitiveness of national industries through the use of natural gas as well as to ensure the efficiency and effectiveness of the natural gas stream.
In order to implement the utilization of natural gas, the Minister of Energy and Mineral Resources set the price of gas, taking into account the economic field, the price of natural gas in the domestic and international purchasing power kosmumen natural gas in the country as well as the added value of natural gas utilization in country.
This rule also states, the pricing of certain natural gas to natural gas users, is done through the adjustment of the price of natural gas purchased from contractors.