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Jakarta Post

Energy Ministry wants power companies to get cheap gas

  • Norman Harsono
    Norman Harsono

    The Jakarta Post

Jakarta   /   Tue, March 17, 2020   /   10:18 am
Energy Ministry wants power companies to get cheap gas State-owned electricity company PLN workers gesture on top of a transmission tower in this undated photo. (PLN/PLN)

The Energy and Mineral Resources (ESDM) Ministry is proposing the inclusion of power companies onto a list of industries eligible for cheap natural gas.

The list, as stipulated by Presidential Regulation (Perpres) No. 40/2016, currently includes the rubber gloves, ceramics, glass, steel, fertilizer, petrochemical and oleochemical industries, which are eligible to procure gas at US$6 per million British thermal units (mmbtu).

The figure is far lower than the national average of around $8 per mmbtu.

“We have suggested the idea. Whether or not the industry is included, depends on when the revised Perpres is issued,” the Energy Ministry’s electrification director general, Rida Mulyana, said in Jakarta on Monday.

Read also: PLN to use LNG in 52 power plants to help reduce oil imports

Providing cheap gas to Indonesia’s power companies, specifically to the country’s largest power producer, state-owned PLN, would also lower electricity prices, he said.

President Joko “Jokowi” Widodo issued a regulation in 2016 to provide cheap gas for certain industries, yet gas prices have remained unchanged over the past four years.

The President announced in January three possible solutions to reduce prices, such as the imposition of the domestic market obligation (DMO) policy on gas producers, fiscal incentives and import relaxations. Jokowi is expected to make a decision on the matter at the end of March.