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Oblige gas traders to build infrastructure to lower prices: Analysts
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Engineers of Perusahaan Gas Negara (PGN) examine gas pipes that will be installed to supply the Tambak Aji industrial estate in Semarang, Central Java on April 24, 2014. (tribunnews.com/Wahyu Sulistiyawan)
T
he government must oblige traders to build infrastructure to help reduce gas prices for industry amid the rise in the price of the commodity to US$13.9 per million metric British thermal units (MMbtu), analysts have said.
High gas prices have become a major concern of businesses competing in the international market, as industries in neighboring countries such as Singapore and Malaysia can purchase gas at almost half the Indonesian price.
An energy observer at Gadjah Mada University, Fahmy Radhi, said the high gas price in the country was caused by the lengthy distribution chains as traders won their gas distribution contracts in several areas without the requirement to build the supporting infrastructure.
“An obligation for gas traders to develop infrastructure would slash gas prices,” he told The Jakarta Post on Friday in Jakarta.
Institute for Essential Services Reform (IESR) executive director Fabby Tumiwa cited the long chains of gas supply from Tangguh liquefied natural gas (LNG) plant in West Papua as a cause of the higher prices.
“The government must simplify the distribution system as one way to cut prices,” he told the Post.
Meanwhile, interim energy and mineral resources minister Luhut Pandjaitan vowed to revise taxation policies on oil and gas to stimulate the industry. “We want to improve business competitiveness by reducing state incomes from oil and gas,” he said in a discussion in Jakarta on Thursday. (rez/ags)
