Pertagas proposes lower price of gas for CNG

By Febry Silaban

Owners of gas re-fill stations (better known here as SPBG) are complaining that the current selling price of compressed natural gas (CNG) are no longer profitable for them due to the overly high price of gas at the upstream level.

Jugu Prajogi, President Director of Pertas Niaga, said that if gas price at the upstream level remains at current level of US$4.72 per mmbtu, it would be difficult for owners of SPBGs to make decent profit as once the gas has been processed into gas fuel (or BBG) for motorists, they could only sell them at Rp 3,100 per liter premium equivalent as mandated by Presidential Regulation No 125, 2015.

Without enough profit, it would be difficult for the businesses to expand the SPBGs as expected by the government to help expand the use of gas among motorists.

As such, Pertagas, a subsidiary of state-owned oil and gas firm PT Pertamina, has suggested for the government to reduce the gas price for CNG production to about $3 per mmbtu. In addition, the government must also revise the selling price of CNG.

Chairman of the Indonesia CNG companies association (APCNGI) Robbi R. Sukardi said the government must revise the CNG selling price so as not to be too far from the prices of oil fuel products. ?If the average price of oil fuel products is Rp 7,000 per liter, the price of gas fuel should be around Rp 3,500 per liter premium equivalent,? he said.

Assistant Manager for CNG & Transportation at Pertamina, Ryrien Marisa acknowledged that the current CNG price level is not longer relevant as it was set in 2011 by the government when the exchange rate of the rupiah against the US dollar was still at around Rp 9,000 per dollar, while current rate has now surged to Rp 13,000 per dollar.

He also said that the government should provide other incentives such as reducing the import tariff for components used in construction of SPBGs.

Editing by Reiner Simanjuntak