Bahlil Seeks Middle Ground on Industrial Gas Price Hike

Energy and Mineral Resources Minister Bahlil Lahadalia has stated that the government is currently seeking a middle ground with stakeholders to address the impact of rising industrial gas prices. “We are looking for a way to mediate, so that industries are not burdened with high prices for industrial gas,” Bahlil said in Jakarta on Thursday. “I have already met with them, with associations and with labour unions as well. Now I am in technical meetings with Pertamina to find an ideal figure so that our industries can remain viable,” he added. According to Bahlil, the increase in industrial gas prices is likely to affect gas users who do not receive the Certain Natural Gas Price (HGBT) facility. “There has been a gas price increase in several non-HGBT industries. Because there are two types of gas: HGBT, which is actually subsidised by the state, and non-HGBT, which is the general price,” Bahlil explained. He noted that some wells in certain regions, particularly in West Java, are experiencing a decline in production. To cover the supply shortfall resulting from this production decline, industries are seeking new sources via Liquefied Natural Gas (LNG) from other regions, meaning logistics costs also affect the final price of the industrial gas. “So, to cover that, LNG is used. LNG is brought in from Papua, Sulawesi, and Kalimantan, and that adds to the cost,” Bahlil said. Previously, Deputy Speaker of the House of Representatives Sufmi Dasco Ahmad stated on Tuesday that the parliament is ready to conduct mitigation regarding reports of potential layoffs affecting more than 50,000 people at a ceramics factory in Bekasi, West Java, due to the industrial gas price hike. This followed a report from the Chairman of the All-Indonesia Workers Union Confederation, Andi Gani Nena Wea, who said that layoffs at one of the largest ceramics factories in Bekasi could occur within the next 7 to 10 days. Dasco immediately contacted the President Director of PT Pertamina to discuss the rising industrial gas prices. “After making contact, I also arranged to meet with representatives of the affected labour unions. Then, to meet with Pertamina’s President Director, perhaps tomorrow, to discuss solutions for the companies that could potentially impact 55,000 employees,” he said.