Minister sign amendment to controversial gas regulation

By Bernard Loebs

Minister of Energy and Mineral Resources Sudirman Said has signed an amendment to the controversial Ministerial Regulation No. 37/2015 on Procedures and Method of Setting Gas Allocation, Utilization and Pricing after the latter sparked protests from gas traders.

Sudirman said on Friday that the amendment has three main points. First, gas allocations are prioritized for households and industries that use gas as raw materials; secondly, companies that get gas allocations should build their own gas infrastructures; thirdly, flare gas is allowed for utilization and trading.

The amendment still need to fulfill all administrative requirements prior to be issued as a regulation.

?In the revised regulation, the government will no longer set priorities regarding companies that will get gas allocations. As such, sate owned enterprises (SOE), owned by either the central government or provincial governments, and private companies have equal rights to get gas allocations provided that they have facilities and sell the gas to end buyers,? he said.

The MEMR Regulation No. 37/2015, which was issued last November, prioritizes gas allocation for SOEs. Private companies may get gas allocations as long as they have built their own infrastructures. The regulation sparked protests from gas traders due to its strong favor toward SOEs.

Editing by Johannes Simbolon