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Natural gas subsidy to continue at higher prices, minister says
The government has finally confirmed an extension to the HGBT subsidy program, but at higher rates of $7 per MMBtu for power plants and $6.5 per MMBtu for industrial use, citing rising global prices of the commodity.
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Two workers review technical data at the Badak liquefied natural gas (LNG) plant in Bontang, East Kalimantan, in this undated photograph. (Courtesy of/badaklng.co.id)
T
he government is set to extend the fixed natural gas price (HGBT) subsidy program that ended at the end of 2024, albeit at higher rates for businesses.
Launched in 2020, the HGBT program allows manufacturers in seven industries – steel, ceramics, glass, petrochemicals, fertilizers, oleochemicals and rubber gloves – to purchase domestic natural gas at a fixed price of US$6 per million British thermal units (MMBtu).
The new arrangement would raise the gas price to around $7 per MMBtu for power plants and $6.5 per MMBtu for industrial use.
Energy and Mineral Resources Minister Bahlil Lahadalia said on Wednesday that the hike was in line with the anticipated rise in global natural gas prices, Kumparan reported.
As regards an Industry Ministry proposal to expand eligible sectors from seven to 15, Bahlil said the subsidy program would remain limited to the seven sectors as previously determined.
“The targeted sectors are the same,” he said, adding that the sectors were selected with a view to seek a balance “between local production and demand”.
Read also: Ceramic makers protest cut in subsidized gas quota
