Industry Actors Want Formulation of Gas Price Based on Products

By : Hariyanto And Aldo Bella Putra | Wednesday, September 27 2017 - 21:30 IWST

Menteri Perindustrian Airlangga Hartarto dan Menteri ESDM Ignasius Jonan
Menteri Perindustrian Airlangga Hartarto dan Menteri ESDM Ignasius Jonan - Jakarta - The Minister of Industry, Airlangga Hartarto, said industry players want the calculation of gas prices for industries to be based on products produced, no longer based on fixed prices. This formulation is expected to spur local gas absorption, such as from the Masela Block, Maluku and Bintuni Bay, West Papua.

"We also want the formulation to be product-based, not fixed. Now there is little change in price formulation. So, if the price formulation has not been met, investors cannot walk," said Minister of Industry at the opening of Seminar on Mining and Energy Expo 2017 in Jakarta, Tuesday (26/09/2017).

Menperin pointed out, in the development of petrochemical industry projects in Masela, investors expect Masela gas base price is set at about US $ 3 per mmbtu in plant gate. Meanwhile, the Ministry of Energy and Mineral Resources estimates that Masela gas prices are the lowest at US $ 5.86 per mmbtu.

However, Airlangga said it had submitted the proposal to the ESDM Ministry some time ago. This request has been responded by the Ministry of Energy and Mineral Resources, which will review the formulation of gas prices expected by industry players.

According to him, if the gas price can be reduced to US $ 3 per mmbtu, there are some industries that are interested. They are PT Pupuk Indonesia, Elsoro Multi Prima, and Kaltim Metanol Industri / Sojitz. The plan of the three industries will absorb the government's supply of 474 mmscfd.

Minister of Industry conveyed that his parties prioritize the acceleration of petrochemical industry development in the country. This strategic sector plays an important role as a raw material supplier for many downstream manufactures such as plastic, textile, paint, cosmetics and pharmaceuticals industries.

With competitive gas prices, the competitiveness of the national petrochemical industry will increase. "The petrochemical industry is one sector that uses natural gas as its raw material, by producing products such as methane, methanol, and ammonia as well as other derivative products. We are focusing on pushing the industry downstream from these sectors " Airlangga said.

Previously, Director General of Chemical, Textile and Multifarious Industries (IKTA), Achmad Sigit Dwiwahjono, said that the government facilitates the provision of facilities and incentives for investors who want to establish petrochemical industry.

For example, fiscal incentives include tax allowances and tax holiday with certain requirements for specific industries. In addition, it is being proposed special incentives in the form of tax exemption for 20 years. The policies that can be utilized by investors in Bintuni and Masela are still being discussed at the Coordinating Ministry of Economic Affairs meeting.

Sigit added that the capacity of the petrochemical industry has been increasing since 2010 with an average of 0.845 million tons per annum (MTPA). Total capacity in 2016 reached 33,727 MT. "Currently, the petrokomia industry in Indonesia is capable of producing 42 types of products, with main products urea, ammonia, ethylene and propylene," he said.

News Comment

Today's Industry

PT Inocycle Technology Group Tbk ("INOV")

Kamis, 14 September 2023 - 15:15 WIB

INOV Poised to Absorb PET Recycling Market Potential

The prospects of PT Inocycle Technology Group Tbk ("INOV") a public company in the field of recycling plastic (PET) bottle waste into Recycled Polyester Staple Fiber (Re-PSF), looks bright for…

Participants of the 43rd ASEAN Summit enjoy the gala dinner at Hutan Kota GBK in Jakarta, Wednesday (09/06). (Photo by: BPMI of Presidential Secretariat)

Senin, 11 September 2023 - 09:07 WIB

Indonesian Cuisine, Cultural Performances Enliven Gala Dinner of 43rd ASEAN Summit

President Joko “Jokowi” Widodo and First Lady Iriana Jokowi hosted a gala dinner for leaders of ASEAN member states, partners, and international organizations at Hutan Kota restaurant in…

President Jokowi and Secretary-General of the United Nations António Guterres, Jakarta, Thursday (09/07). (Photo by: BPMI).

Senin, 11 September 2023 - 07:45 WIB

ASEAN, UN to Enhance Cooperation in Maintaining Regional Peace

On the margin of the 43rd ASEAN Summit, President Joko “Jokowi” Widodo Thursday (09/07) hosted Secretary-General of the United Nations António Guterres in a bilateral meeting at the Kakatua…

President Jokowi shakes hands with PM of Japan Fumio Kishida at JCC in Jakarta, Thursday (09/07). (Photo by: BPMI of Presidential Secretariat)

Senin, 11 September 2023 - 06:40 WIB

Indonesia, Japan Agree to Raise Partnership Status to Comprehensive Strategic

Indonesia and Japan have agreed to raise the partnership status of the two countries to strategic comprehensive, President Joko “Jokowi” Widodo has said.

PT Sariguna Primatirta Tbk (Tanobel Group)

Selasa, 05 September 2023 - 09:45 WIB

Aggressive Tactics Boost Brand Awareness, CLEO Achieves Record- Breaking Sales in First Half 2023

The increasing public activity post pandemic has opened up opportunities for business growth in the consumer goods product for bottled drinking water (AMDK), which is better known as "CLEO",…