Government to announce new gas price formula today

Minister of Energy and Mineral Resources Ignasius Jonan said that the government is set to announce today (Wednesday) the new gas price formula for three selected industries.

?It will be announced tomorrow afternoon at the ministry,? Jonan said on Tuesday at the State Palace.

As has been previously reported, the government has decided to set a lower price of gas for three industries including petrochemical, fertilizer, and steel. The new price will not exceed US$6 per mmbtu, Jonan said last week.

Deputy Minister of Energy and Mineral Resources Arcandra Tahar said on Tuesday that the government decided to provide lower gas price for the three aforementioned industries first because they have large multiplier effect. He declined to provide further details about the new gas price formula.

According Presidential Regulation No 40/2016 on the reduction of gas price, signed by President Joko Widodo (Jokowi) on May 3, the government will lower gas price for seven industries in a bid to help accelerate investment and economic growth.

But 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 the high 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