Govt asked to speed up development of city gas distribution network

The Association of Indonesian Young Entrepreneurs (HIPMI) has called on the government to speed up the development of city gas distribution networks in a bid to further reduce the country?s dependence on oil as fuel.

Firlie Ganinduto, the head of the association?s mines and energy department, said in Jakarta on Thursday that Indonesia needed to build more gas distribution networks in the country?s major cities, because the existing gas distribution facilities were only able to cover just 35 percent of the potential market.

He said that the existing facilities mostly built by state-owned PGN and Pertamina since the past 10 years were certainly not enough to meet the growing demand from both households and industrial users which at present still relied heavily on oil-based fuel and liquefied petroleum gas (LPG).

According to him, the expansion of the gas distribution networks in the country?s major cities would need at least Rp 94 trillion (US$=Rp 11,000) in investment.

?The government should offer incentives in the development of gas distribution infrastructure so as to attract investors. Such a project will not only support the government?s long term program to reduce reliance on oil-based fuel, but it will also help create employment,? he added.

In order to reduce reliance on oil as fuel, the government has launched among others a program to encourage the public to use LPG rather than kerosene for cooking. The government is targeting up to 90 percent of the country's hosueholds use LPG for cooking by the end of this year.

PGN said in its website that it already has distribution network in the country's main cities such as Jakarta, Bekasi, Bogor, Kerawang, Cirebon, Surabaya, Palembang, Medan, Batam and Pekanbaru.

Last month, Tubagus Haryono, the chairman of oil and gas downstream regulator BPH Migas, said the agency would push for the development or expansion of city gas networks in Depok, Palembang, Surabaya and Bekasi this year.

Firlie said as that natural gas distributed through pipeline network is 50 percent cheaper than LPG, the development of gas distribution networks would not only benefit customers but also could bring a positive impact on the overall economy. (*)