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Cheap gas incentives to cost government Rp 121.78 trillion in forgone revenue
With the cheap gas incentives, seven gas-intensive industries can buy natural gas at $6 per million British thermal units (mmbtu), below the average $8 per mmbtu
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Energy and Mineral Resources Minister Arifin Tasrif speaks during a video conference with members of House of Representative (DPR) Commission VII, which oversees energy, on May 4. (JP/Screenshot)
T
he long-awaited cheap gas for certain industries will cost the government Rp 121.78 trillion (U$804.31 million) in forgone nontax revenue (PNPB) from gas production during the duration of the measure from 2020-2024, Energy and Mineral Resources Minister Arifin Tasrif has said.
On the other hand, the cheap gas would give the government additional income of about Rp 125.03 trillion mostly due to the significant cut in existing energy subsidies, Minister Arifin said during a virtual hearing with House of Representative (DPR) Commission VII on Monday.
Based on these estimates, the government would receive a net income of Rp 3.25 trillion from the cheap gas incentives, the minister added.
Under the policy, seven gas-intensive industries, namely the rubber gloves, ceramics, glass, steel, fertilizer, petrochemical and oleochemical industries can buy natural gas at $6 per million British thermal unit (mmbtu), below the average $8 per mmbtu.
“These industries have been hit. They went from 500,000 to only 300,000 workers,” he said during the hearing.
