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Jokowi Offers 3 Options to Reduce Industrial Gas Prices PDF Print E-mail
Written by Maizer   
Wednesday, 08 January 2020

President Joko Widodo (Jokowi) is furious because the price of industrial gas has not declined until now. In fact, the order to reduce the price of industrial gas has been listed in Presidential Regulation Number 40 of 2016 concerning Determination of Natural Gas Prices.

 

In the Perpres, the government set the price of industrial gas at US $ 6 or around Rp. 83,784 per Million British Thermal Unit (mmbtu). Currently, the price is in the range of US $ 9-US $ 12 or around Rp 125,676-Rp 167,568 per mmbtu.

 

"Until now, we (the government) have not been able to resolve the high gas price," Jokowi said when opening a limited meeting at the Presidential Office, Jakarta, Monday (6/1). According to Jokowi, gas cannot be seen as mere commodities. Gas should be considered as a development capital that will strengthen the national industry.

 

There are six industrial sectors that use 80% of the national gas volume. Among them are the chemical, food, steel, ceramics, fertilizer and electricity generation industries.

 

"This means that when the portion of gas is very large in the structure of production costs, the price of gas will greatly affect the competitiveness of our industrial products on the world market," he said. On that basis, Jokowi requested that the price of industrial gas be re-calculated. The Head of State also hopes that his staff will find the cause of the high gas prices from upstream to downstream.

 

The first option is to reduce or eliminate the government's portion from the results of the cooperation contract contractor (K3S) activities of US $ 2.2 or around Rp 30,720 per mmbtu.

 

The second option requires K3S to supply gas for the domestic market obligation (DMO), which can be given to the State Gas Company (PGN). "So, it can be given to industry," Jokowi said.

 

The third option is to free up gas imports for industry. The former Governor of DKI Jakarta considers that the three options must be taken so that the price of industrial gas decreases.

 

"If it is not decided soon it will continue like this. The choices are actually only two, protecting the industry or protecting gas players. Just like that, "he said.

 
		
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