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Firms demand incentives as govt asks for help building household gas network
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A PGN technician inspects a household gas meter on Oct. 17, 2019, beside a homeowner at her residence in Pasuruan, East Java. (JP/Norman Harsono)
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ndonesia is looking to involve private companies to accelerate the development of household gas networks, but firms said their participation would only be possible if they are provided with incentives to ensure long-term profitability.
The government is discussing a revision of Presidential Regulation No.6/2019 to make ways for private sector involvement through a public-private partnership (KPBU) scheme.
Under the prevailing regulation, the country relies entirely on state-owned gas company PT PGN to build the project on a state-assignment basis.
Aris Mulya Azof, chairman of the Indonesian Gas Society, told The Jakarta Post on Monday that the government must ensure that firms can acquire a decent sale price that allows them not only to cover operating and maintenance costs, but to be profitable in the long term.
He also added that firms need certainty of upstream gas supply and ease in acquiring licenses from the local government.
When asked about the attractiveness of the project, Aris said, “Of course, it will be attractive with incentives, such as [a profitable] gas selling price.”
Indonesia was aiming to reduce overdependence on costly liquefied petroleum gas (LPG) imports by shifting to household gas networks.
