Government finally sets gas price for three industries

The government has finally decided gas price for three industries including petrochemical, fertilizer and steel to not exceed US$6 per mmbtu.

Minister of Energy and Mineral Resources Ignasius Jonan said in a statement on Thursday that the new price will be effective starting January 1, 2017. The statement was issued following a meeting of economics ministers on the gas price issue.

He added that a ministerial regulation on the new gas price for the three industries will be issued next week.

The statement said that the gas price is in line with Presidential Regulation No 40/2016 on the reduction of gas price, signed by President Joko Widodo (Jokowi) on May 3. The lower gas price is intended to help improve the competitiveness of the domestic industries, and help accelerate economic growth.

Minister of Industry Airlangga Hartarto said in October that the government has identified 10 industries and one industrial estate to be eligible to the lower gas price. It is still unclear as to when gas price for the other industries will be lowered.

Last month, Jokowi complained about thehigh gas price for domestic industries at between $9.5-11 per mmbtu, lower than $4-7 per mmbtu in neighboring countries.

Editing by Reiner Simanjuntak