Chamber of Commerce and Industry: Industry Will Be Disturbed With PGN Conditions Again Less Healthy

By : Hariyanto And Aldo Bella Putra | Thursday, February 15 2018 - 19:00 IWST

INDUSTRY.co.id - Jakarta - The change in nomenclature of PT Pertamina (Persero) stipulated by the government through the Ministry of State Owned Enterprises (SOEs) has had an impact on the removal of the gas directorate.

The abolition is also as preparation for the establishment of holding company of oil and gas BUMN that will combine PT Perusahaan Gas Negara Tbk (Persero) into Pertamina. Later, PGN is prepared to be a gas sub directorate.

The gas directorate was abolished and his business was moved gradually to PGN to help the dying PGN on the stock market and need a blood transfusion from Pertamina, said Achmad Widjaja, Vice Chairman of the Standing Committee of the Indonesian Chamber of Commerce and Industry (Kadin) for Upstream Industries and Petrochemicals in Jakarta, Wednesday 14/2/2018).

Pertamina's gas business has been growing since 2001-2002 with the gas marketing agency being upgraded to be under the control of LNG's vice president. About 10 years later it was upgraded to a gas directorate and under the direct control of a Pertamina director. But on February 13, 2018, the directorate was abolished.

According to Achmad, Pertamina, which has a business sector from upstream to downstream gas, creates a gas supply that does not bring changes to the improvement. Industries that have suffered because they have not received gas prices in accordance with Presidential Regulation No. 40 of 2016 then have to face the removal of Pertamina's gas directorate which has been considered to be more reliable.

The industry which is the contributor of future economic growth will be disrupted with PGN condition which is less healthy, Achmad said.

Presidential Decree Number 40 signed by President Joko Widodo on May 3, 2016 contains about the decrease of natural gas price. The Minister of Energy and Mineral Resources (ESDM) is instructed to fix the price of natural gas by considering the economy of the field, the price of natural gas in the country and internationally, the purchasing power of domestic natural gas consumers and the added value of the utilization of natural gas in the country.

According to Achmad, industrial customers have been asked by PGN to sign a new Gas Sales and Purchase Agreement (PJBG) starting April 2018. Though price certainty does not yet exist.

What will happen in the future is the rising cost of the industry. As a result the competitiveness that the president always asked to be competitive against the export market will never materialize, he said.

Achmad added with the long story of the gas industry to the pressure of merger that has not been realized in PGN will have an impact on the uncertainty in the future especially with the strong global world calling the concept of go green and emission reduction.

Gas will be lost on the way; the existing solar industry will continue to enter the import schedule that will be a mere burden. When we can move forward when inconsistent government in the state owned company's own policy always happens, he said.

Pertamina's future business challenges will be increasingly complex with increasing national energy needs, but not accompanied by the intention of availability and building infrastructure.

From year to year Pertamina can only mutually replace leadership, not focus policy execution in line with the central government," he said.

Previously, Deputy Minister of Mining, Strategic Industries and Media Ministry of State-Owned Enterprises, Fajar Harry Sampurno said that in the latest structure of Pertamina's management, the government has removed the gas directorate because later on Pertamina's gas business will be handled by gas sublaying through the merger of PGN and PT Pertamina Gas (Pertagas) .

So the gas is lost, will be handled sub holding gas. The important thing is to change this paradigm, improve and improve Pertamina's services to consumers, to users and customers, he said.

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