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Jakarta Post

Indonesian gas prices still competitive: Deputy minister

  • Farida Susanty

    The Jakarta Post

Jakarta   /   Tue, February 7, 2017   /  12:52 pm
Indonesian gas prices still competitive: Deputy minister Energy and Mineral Resources Minister Ignasius Jonan (center), State-owned Enterprises Minister Rini Soemarno (left) and Deputy Energy and Mineral Resources Minister Archandra Tahar attend a Cabinet meeting at the Presidential Office. (Antara/Rosa Panggabean)

Indonesia's natural gas prices are still competitive although they have risen over the years due to poor infrastructure, says Deputy Energy and Mineral Resources Minister Archandra Tahar.

"At the beginning of the 2000s, gas prices and the cost of distribution were still affordable for industries. Starting in late 2014, the price of pipeline gas became costly compared to liquefied natural gas (LNG)," he said in his welcome speech at the 8th IndoGas conference in Central Jakarta on Tuesday.

"However, Indonesia's domestic pipe gas price is still below the world's statistical average."

Domestic prices of piped gas average around US$9 per million British thermal units (mmbtu), while the LNG spot prices could be as low as $5 per mmbtu.

(Read also: Jokowi calls for cuts to gas prices)

In 2015, global gas prices for both piped gas and LNG fluctuated between $3 and $12 per mmbtu.

The government has been working hard to slash prices for certain industries and has cut prices to around $6 per mmbtu for state-owned firms in the petrochemical, fertilizer and steel industries.

Furthermore, the Energy and Mineral Resources Ministry recently issued a ministerial decree allowing electricity producers to import LNG if prices of local piped gas exceed 11.5 percent of the Indonesian Crude Price (ICP). (bbn)

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