Indonesia Energy Ministry: Increase Competitiveness, Certain Industries of Natural Gas Users are expected to be More Efficient and Innovative

The government has set the price of certain industrial natural gas, including the needs of PLN, to USD6 per MMBTU (Millions British Thermal Units) since April 2020. Low energy prices are expected to be an attraction to increase industrial investment capabilities. The more investment in the downstream side, the more significant the absorption of labor. If the industry is growing, it will encourage the upstream oil and gas sector.

The competitiveness of the seven industrial sectors (Fertilizer, Petrochemical, Steel, Ceramic, Glass, Rubber Gloves and Olechemicals) with gas-based production facilities has bounced back, after previously slowing down, and even stalling due to less competitive gas prices.

In the electricity sub-sector, the Government’s policies related to natural gas prices were also able to reduce the budget for electricity subsidies in 2020. The contribution to the decline in natural gas prices for electricity reached around Rp. 14 trillion or 37% of the savings in fuel costs. electricity. This figure shows that Government policies also have a major impact on saving the State Budget (APBN).

“This proves that the policies that have been set by the Government have a positive and significant impact, both for the competitiveness of certain industries, the upstream oil and gas sector as well as the state budget savings at the same time,” said the Head of the Bureau of Communications, Public Information Services and Cooperation of the Ministry of Energy. and Mineral Resources (ESDM) Agung Pribadi, in Jakarta, Monday (16/8).

Meanwhile, responding to the fact that a small part of the ceramic industry in East Java received gas prices above USD 6 per MMBTU, this was solely due to changes in the economy of the oil and gas fields in East Java.

“In Ministerial Decree (Kepmen) ESDM 134 of 2021 concerning Users and Prices of Certain Natural Gas in the Industrial Sector, 75% of the 77 ceramic industries or 58 industries receive a price of USD 6 per MMBTU. The remaining 25% or 19 ceramic industries get a price above USD 6 because of changes in the economic field in the East Java region,” explained Agung

“Therefore, the ceramic industry is expected to be more efficient and innovative, the goal is to be more competitive and encourage the competitiveness of the ceramic industry,” he continued.