TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Government to tighten eligibility requirements for cheap gas recipients
The gas incentive would have “very big consequences” on the state budget, particularly in relation to fuel and electricity subsidies, Finance Minister Sri Mulyani Indrawati said.
Change Size
Gas issue: An operator monitors the loading of LNG tankers into the MT Aquarius tanker at the Donggi Senoro refinery in Uno village, Batu Banggai, Central Sulawesi. (JP/Ricky Yudhistira)
T
he government is tightening its criteria for which industries are eligible to receive cheap natural gas as the incentive, which will be launched on April 1, is expected to put further strain on the state budget.
President Joko "Jokowi" Widodo has emphasized that industries eligible to receive cheap gas must be able to "add value to our economy" by creating jobs, boosting investment, improving productivity and increasing tax collection.
These industries may buy natural gas at US$6 per million British thermal units (mmbtu), which is below the market average of over $8 per mmbtu.
“I need to remind you to really, really verify and evaluate the industries receiving the incentive,” said Jokowi during a live-broadcast meeting with several ministers in Jakarta on Wednesday.
Read also: ‘We were hopeless’: Industries cheer plans to lower gas price amid economic gloom
Finance Minister Sri Mulyani Indrawati concurred with Jokowi, saying that the incentive, as stipulated under Presidential Regulation No. 40/2016, would have “very big consequences” on the state budget, particularly in relation to fuel and electricity subsidies.
“Companies that receive the incentive must demonstrate improved performance,” she said.
