Govt cuts LNG price to protect industry, jobs

Jakarta (ANTARA) - Energy and Mineral Resources Minister Bahlil Lahadalia emphasized that the Indonesian government's decision to reduce liquefied natural gas (LNG) prices for industries would help maintain industrial competitiveness and protect jobs in Indonesia.

"This is for industries that manufacture goods. We want to protect and sustain existing jobs," he said in Jakarta on Monday.

Bahlil explained that the LNG price reduction was achieved through efficiency measures across the supply chain, involving the government, cooperation contract contractors (KKKS), and distributors.

According to him, the policy took effect immediately following the announcement.

He further explained that the government had implemented three gas pricing schemes for industries: the Certain Natural Gas Price (HGBT) program, piped gas, and LNG.

However, he acknowledged that LNG prices had increased sharply in recent months.

"The significant increase occurred in LNG, with prices rising from US$13-14 to as high as US$23," he said.

Consequently, the government decided to share the burden of reducing costs by involving all stakeholders in the gas sector to lower LNG prices for industries.

"That is why the government is stepping up to share responsibility with the upstream oil and gas sector, the KKKS, and state-run oil and gas company Pertamina to reduce costs. To put it simply, now is not the time to be overly focused on profit," he said.

In addition to reducing LNG prices, the government is continuing to strengthen national gas infrastructure by developing inter-regional pipelines, with several projects targeted for completion by 2027.

In Sumatra, the government is developing the Dumai–Sei Mangkei gas pipeline network and expanding the capacity of existing pipelines to make gas distribution more flexible.

"If there is a gas surplus in Sumatra, we can divert it to Java. If there is a surplus in East Java, we can shift it to West Java," the Minister said.

On Monday, Bahlil announced a reduction in industrial LNG prices to US$13 per million British thermal units (MMBtu), from around US$20-23 per MMBtu, in response to concerns raised by industry players as higher gas prices weighed on production costs.

Related news: Indonesia slashes industrial LNG prices to shield manufacturers

Translator: Ahmad Muzdaffar, Raka Adji

Editor: Bayu Prasetyo

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