Purnomo says downstream gas industry to be tightly regulated

Indonesian downstream gas industry will be tightly regulated to avoid the occurrence of natural monopoly that might create market distortion.

?Despite liberalizing the market, the regulatory body which will formed to oversee downstream industry will apply strict control on the industry,? said Purnomo addressing Indonesian Gas Association annual meeting Tuesday.

Under the new oil and gas law, downstream gas industry will be opened to new players but one company would only be given license to operate in a specific area.

? The control mechanism would include fixing gas transmission price based on healthy internal rate of return,? he said.

?The control model that Indonesia is using would be somewhat similar to those applied in the US or Europe,? he added.

Purnomo further said that the government had set up a team to write implementing regulations on oil and gas law, which include downstream regulation. (alex)