Electricity export deal to Singapore must be mutually beneficial

Jakarta (ANTARA) - Secretary for Economic Policy at the Golkar Party’s Central Executive Board, Abdul Rahman Farisi, stated that the electricity export agreement from Indonesia to Singapore must be mutually beneficial for both parties and based on a fair price for both. “We appreciate the stance of the Minister of Energy and Mineral Resources, Bahlil Lahadalia, who has shown the government’s prudence in determining the price. This is the right step considering Indonesia’s strategic position as an energy exporting country,” he said in Jakarta on Wednesday. Economically, electricity prices are indeed determined by market mechanisms, but Indonesia has a better bargaining position to influence the price because it is the exporting country offering the electricity. “Meanwhile, Singapore is the party that needs the supply,” said the former lecturer at the Faculty of Economics and Business, Hasanuddin University. He explained that the price equilibrium point is an important factor because it will determine the extent to which electricity exports provide economic benefits for Indonesia while remaining attractive to Singapore as the purchasing country. He assessed that setting the right price will demonstrate how much benefit Indonesia receives from the electricity sale. On the other hand, Singapore will also consider whether buying electricity from Indonesia is more efficient than building its own power generation capacity, which has various limitations, including land constraints. Abdul Rahman considered Minister Bahlil’s statement, which desires a win-win solution for the electricity export price, as reflecting the government’s understanding of Indonesia’s bargaining position in regional energy cooperation. “With this position, Indonesia has the room to ensure that the price formed is a proper price, profitable for Indonesia, while still providing economic value for the cooperation partner,” he said. He emphasised that in every international negotiation, government officials representing the country must always prioritise national interests and public welfare. Every negotiation conducted on behalf of the state must always be directed towards obtaining the greatest possible benefit for the prosperity of the people. “International cooperation is certainly important, but economic benefits, advantages for Indonesia, and the sustainability of the cooperative relationship must be the main objectives,” he said.