The Hustle and Bustle of National Industrial Growth is Hampered by Disparities and High Gas Prices

INDUSTRY.co.id - Jakarta - In the midst of the hustle and bustle of national industrial growth, the issue of gas prices for industry is still a frightening specter for business actors.

Chairman of the Sheet and Safety Glass Association, Yustinus Gunawan requested and urged the government to implement Perpres number 40 of 2016 related to the decline in industrial gas prices.

"We ask the government to immediately lower the price of natural gas according to President Joko Widodo's instruction," Yustinus told INDUSTRY.CO.ID during the Forum Group Gas Discussion Forum for Industry at Ministry of Industry, Jakarta (17/10/2017).

According to him, in recent years there has been deindustrialization. Conditions such as this will make the competitiveness of national industry getting worse.

"The performance of the national economy persisted and tended to rise, but the industry tended to decline," he explained.

On the other hand, the imbalance of natural gas price for industry is still happening in Indonesia. Therefore, the Ministry of Industry is working to ensure that the national industrial sector has sufficient and efficient energy supply.

"The government is trying to narrow the space of disparity by guaranteeing the availability of supply, the affordable price and the improvement of distribution infrastructure, the price setting" said Happy Bone Zulkarnaen as Special Staff of the Minister of Industry.

According to him, in 2016 the average price of natural gas amounted to 5.62 US dollars per Million Metric British Thermal Unit (MMBTU) for industry. However, there is a high price disparity in the industrial sector, where the lowest price is only 0.22 US dollars per MMBTU, while the highest price reaches 8.62 US dollars per MMBTU.

"This is due to differences in the field economy, the distance between users with gas sources, types of gas sources, gas infrastructure and market competition involving producers and consumers," Happy said.

Nevertheless, continued Happy, the government through the Minister of Energy and Mineral Resources Regulation no. 40 of 2016 also provides special price adjustments to the industries of the fertilizer industry, petrochemical industry and steel industry.

Based on Minister of Industrial data, currently the utilization of natural gas in 2016 was recorded at 58.4 percent for domestic, and 41.6 percent for export.

Utilization of domestic natural gas itself is dominated by the industrial sector by 21.68 percent, electricity 15.71 percent, and 9.95 percent of fertilizer.