Ministry revising several gas sales agreements to lower prices

By Bernard Loebs

The Ministry of Energy and Mineral Resources is revising several gas sales and purchasing agreements following the issuance of Presidential Regulation No. 40/2016 which instructs lowering gas prices for industries, a senior official of the ministry said.

?We shall start with (revising) agreements on directly purchasing from the upstream sector, and then agreements on purchasing from traders,? Director of Program Oversight at the Directorate General of Oil and Gas Agus Cahyono Adi said.

The President signed the new regulation on May 3, but the lower gas prices are retroactive as of January 1, 2016.

Since the new prices take effect retroactively, gas buyers will be able to recoup their overpayment, not instantly, but through deductions from their payment in the next payment period, Agus said.

The presidential regulation also states that the lower gas prices will only be applied to certain industries, such as fertilizer, petrochemical, oleo chemical, steel, ceramic, glassware and rubber glove indsutries.

Editing by Johannes Simbolon