Minister: Gas price may drop by 30%

Minister of Energy and Mineral Resources Sudirman Said stated that gas price in the country can potentially drop by up to 30 percent through a number of planned measures by the government.

Sudirman said in a statement that there has been complaints that the gas sector in the country has not been competitive, therefore actions must be taken to help ensure that the gas sector can be conductive for the domestic industries.

?We?ll continue to improve our gas management from time to time to make it more conducive toward the industries. We?ll continue to push gas price to decline by up to 30 percent,? he said, adding that the lower gas price is expected to help accelerate investment in the downstream industries such as manufacturing.

Among of the planned actions by the government to push for lower gas price including reducing the government?s take in upstream oil and gas projects.

Sudirman said that margins in the gas distribution side will also be regulated to ensure fair transmission and distribution expenses. Setting up a national gas buffer agency will also help ensure gas supply and price reduction through the introduction of a more simple system.

Sudirman also welcomes proposal to integrate the operation of two state-controlled gas distribution firms PT PGN Tbk and PT Pertamina Gas, a move that is expected to help bolster efficiency in gas distribution.

In relation to Minister of Energy and Mineral Resources Regulation No 37/2015, the government reiterates that one of the objectives is to lower transaction cost, both in terms of shortening distribution and transportation chains.

Editing by Reiner Simanjuntak