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Jakarta Post

‘We were hopeless’: Industries cheer plans to lower gas price amid economic gloom

  • Eisya A. Eloksari and Norman Harsono

    The Jakarta Post

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Jakarta   /   Wed, January 8, 2020   /  08:08 am
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Engineers work at an oil and gas processing site. The government is reviewing ways to lower gas prices for industrial customers and boost the competitiveness of local industries.(Antara/R.Rekotomo)

For President Joko “Jokowi” Widodo, it was frustrating that nearly four years after he issued a presidential regulation that limits gas prices from exceeding US$6 per million British thermal unit (mmbtu), prices now average at $8 to $9 per mmbtu. Even more frustrating, 80 percent of Indonesia’s gas supply is being consumed by domestic industries, which he relied on to stoke growth amid a domestic economic slowdown. The industries include electricity production, chemical, food, ceramic, steel, fertilizer and glass –all basic materials for day-to-day consumer products. Jokowi demonstrated that he is serious about the issue by leading discussions on gas prices in the first Cabinet meeting of the year. He then announced three potential concrete measures to lower industrial gas prices, namely through tax incentives, domestic market obligations (DMO) and simplifyi...