Gas price in North Sumatra lowered

The government has lowered gas price for certain industries in North Sumatra by US$1.09 per mmbtu in the first semester of this year to $11.13 per mmbtu as part of a policy to lower gas price for industries in a bid to help improve competitiveness of domestic industry and attract investment, Kompas reported on Saturday.

The paper quoted Sales Area Head at IDX-listed gas distribution firm PT PGN Tbk as saying that the gas price will further be reduced to around $10 per mmbtu in the second half of this year.

He said that industries must meet requirements set by the government in order to be eligible to get the lower gas price.

But Head of the Association of Gas Consuming Industries in North Sumatra, Johan Brien said that the gas price must be further lowered to around $8.7 per mmbtu to make industries in the province more competitive.

He pointed out that gas price in East Java is much lower at $7 per mmbtu, while in neighboring countries is around $5 per mmbtu.

The government of President Joko Widodo introduced in May of this year a new policy to reduce gas price for certain industries, including fertilizer, petrochemical, oleo chemical, steel, ceramics, gloves, and glassware, which was applied retroactively since January. (*)