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Jakarta Post

Ministry suggests DMO to lower gas prices

  • Norman Harsono

    The Jakarta Post

Jakarta   /   Tue, January 14 2020   /  01:58 am

The Energy and Mineral Resources Ministry has chosen to pursue a combination of a domestic market obligation (DMO) and fiscal incentives to reduce industrial gas prices in the hope of fulfilling a four-year-old promise from President Joko “Jokowi” Widodo.The ministry will, among others, expect oil and gas companies to prioritize selling their liquefied natural gas (LNG) to state-owned gas distributor PGN as part of efforts to bring the gas price down to US$6 per million British thermal units (mmbtu) as promised by the government, from between $8 and $9 per mmbtu at present.“As long as PGN’s infrastructure runs at full capacity, it can sell at $6 per mmbtu,” said the ministry’s acting oil and gas director general, Djoko Siswanto, on Jan. 8.Should PGN fail to bring gas prices down even with the higher LNG supply, then the government will reduce upstream costs — that average $...