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Industry ministry claims natural gas price hike has insignificant impact on industry

Source
Tempo - January 31, 2025

Han Revanda, Jakarta – Spokesperson of the Industry Ministry, Febri Hendri Antoni Arief, said that the increase in certain natural gas prices (HGBT) will not significantly impact the industry. The government's natural gas incentive price is reported to have increased from US$6 per MMBTU to US$6.5.

"The Ministry of Industry has not conducted a study on the impact of the HGBT increase on the industry, but for the industry, supply stability and price stability are crucial. If the price slightly increases, it does not have a significant impact," said Febri in a press conference at the Ministry of Industry office in Jakarta on Thursday, January 30, 2025.

For example, Febri said the surcharge implementation for seven industrial sectors receiving HGBT is a variable that affects the industry. With this additional cost, the gas price at certain times is US$6 per MMBTU, but at other times, it can soar to US$8-12 per MMBTU.

According to Febri, the surcharge imposition significantly interrupts the industry. In contrast, a price increase of US$0.5 per MMBTU, as long as the supply is smooth, is sufficient for the industry.

Until now, the government has designated seven industrial sectors as HGBT recipients, namely ceramics, fertilizers, petrochemicals, oleochemicals, steel, glass, and rubber gloves. Other sectors not classified as HGBT incentive recipients must purchase gas at commercial prices, which are above US$10 per MMBTU.

The Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia previously revealed the policy regarding HGBT had been raised. The reason is that the current global gas prices are soaring. Meanwhile, HGBT for raw materials is still lower than the gas prices for energy needs.

Bahlil estimated that gas for energy is priced at approximately US$7 per MMBTU. Meanwhile, gas used for raw materials is around US$6.5 per MMBTU. He confirmed that the sectors receiving cheap gas prices are final.

Source: https://en.tempo.co/read/1970035/industry-ministry-claims-natural-gas-price-hike-has-insignificant-impact-on-industr

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