Gas producers to be required to allocate more gas to domestic market

The government will issue a new regulation to require gas producers to allocate at least 30 percent of their gas production to domestic market as compared to 25 percent at present, Investor Daily reported on Friday.

“The regulation will be in the form of a Presidential decree. It is now under preparation,” Wimpy S Cecep, the third deputy of the chief economic minister, told newsmen on Thursday.

Wimpy, who is also the head of the research and development at the ministry of energy and mineral resources, said that the revision of the existing regulation on domestic market obligation (DMO) imposed on gas producers would be quite crucial to ensure sufficient gas supply for the local industries.

Besides gas, the government will also increase the domestic market obligation for other commodities such as oil and coal. At present, gas producers are only required to set aside 25 percent of their production for domestic use.

Wimpy said that the domestic market obligation imposed on oil and gas companies is regulated under the new oil and gas law. But the article related to domestic market obligation has to be amended because it does not support the national interest.

He said, however, the new regulation on domestic market obligation will be applied only to new oil and gas contracts. (*)