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Efficient supply chain key to lower gas prices: Association
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President Joko “Jokowi” Widodo (left) and Vice President Jusuf Kalla (second left) lead a limited Cabinet meeting at the Presidential Office in Jakarta on Sept.30. (Antara/Yudhi Mahatma)
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ndonesian Oil and Gas Pipeline Association (IAPMIGAS) chairman Hendra Jaya has said gas prices for the industrial sector could be lowered to US$6 per million British thermal unit (mmbtu) if gas distribution cost components were reduced.
He said the high price of gas in Indonesia was caused by a long distribution chain, which increased distribution costs.
Citing an example, Hendra said, the gas price for the industrial sector in West Java stood at around $9 per mmbtu while the gas price at wellhead, or upstream, stood at around $6 per mmbtu.
"We urge greater efficiency in the value chain because it will affect gas prices," Hendra said in Jakarta on Thursday.
He believes distribution cost components, such as service and distribution costs as well as gas producer margins and toll fees, could be reduced.
Hendra said it was expected that the government’s decision to shorten the gas distribution chain could translate its cheap gas price plan into reality. “A gas price of $6 per mmbtu is not impossible," he asserted. (ebf)
