Ministry to soon issue regulation on gas price reduction
Wednesday, June 22 2016 - 01:42 AM WIB
The Ministry of Energy and Mineral Resources will soon issue a regulation implementing Presidential Regulation No. 40/2016 on lower gas prices for certain industries including fertilizer, petrochemical, oleo chemical, steel, ceramics, gloves, and glassware industries.
?We are finalizing the draft regulation. I think it can be issued this week,? said Minister of Energy and Mineral Resources Sudirman Said in Jakarta.
The ministry?s Secretary General Teguh Pamudji said business players have been anxiously waiting for the issuance of the regulation, which is part of the economic policy package of the government. It was not easy to draft such a regulation since it will cause a decline in the government?s revenue from the oil and gas sector.
The government cuts its gas production share to lower gas prices for certain industries.
?The regulation is something that people are waiting for. Discussions on the draft regulation was coordinated by the coordinating minister of economy. The regulation was not easy to make,? Teguh said
The draft regulation has been sent to the legal office of the ministry for review. ?Perhaps, it will be signed by the minister in one or two days,? he said.
President Joko Widodo (Jokowi) signed the presidential regulation on May 3 but lower gas prices retroactive as of January 1, 2016. The new policy is expected to help accelerate growth of the industries.
According to the new regulation, the minister of energy and mineral resources will determine the new gas price if the current price is deemed not economically feasible for the aforementioned industries or exceeds US$6 per mmbtu.
Editing by Johannes Simbolon