Minister to regulate gas pipeline toll fee

Minister of Energy and Mineral Resources Ignasius Jonan said that he would soon summon large companies engaged in gas distribution to seek ways to lower gas distribution cost.

Speaking at the opening of the 2017 National Natural Gas Forum on Wednesday in Jakarta, Jonan described that the current gas pipeline toll fee as unfair or not competitive, causing gas price for end consumers such as manufacturing industries to be quite high, which in turn has undermined the competitiveness of domestic industries.

?The plan is to summon this week the large stakeholders such as Pertagas, Pertamina, PGN, the large private firms, SKK Migas (upstream authority) and Ditjen Migas (Directorate General of Oil and Gas). We?ll discuss (how to create) fair (toll fee). Since we have asked the upstream (gas producers) be efficient, the midstream must also (offer) competitive price,? Jonan said as quoted in a statement issued by the ministry?s Directorate General of Oil and Gas.

Jonan indicated that the government will regulate the gas distribution cost including in terms of internal rate of return, profit margin, pipeline depreciation, etc.

He said that if necessary, the upcoming new regulation will also be applied to existing gas pipelines in a bid to bring down gas distribution cost as has been directed by President Joko Widodo.

Editing by Reiner Simanjuntak