Industry Ministry confident LNG price cut will be a breath of fresh air for industry

The Ministry of Industry has affirmed that the policy of lowering liquefied natural gas (LNG) prices for the industrial sector is a much-needed breath of fresh air amid current challenges. In a statement confirmed in Jakarta on Tuesday, Ministry Spokesperson Febri Hendri Antoni Arif expressed high appreciation for the initiative of House of Representatives Deputy Speaker Sufmi Dasco Ahmad in bringing together stakeholders to find solutions to industrial gas supply issues. “We appreciate the deep concern and concrete steps taken by Mr Sufmi Dasco Ahmad as Deputy Speaker of the DPR. The facilitation he provided to bring stakeholders together to find a way out of this gas problem is a breath of fresh air that is very much needed by industry amidst today’s heavy and complex challenges,” he said. According to Febri, certainty of natural gas supply at competitive prices is a crucial factor for the sustainability of investment and productivity across various strategic industrial sectors. The LNG price reduction is expected to further ease the energy cost burden on businesses, enabling more efficient production activities. In addition to appreciating the DPR’s move, the ministry also conveyed industry players’ aspirations regarding the implementation of the Specific Industrial Gas Allocation (AGIT) policy. The manufacturing sector hopes that the gas supply quota set by the government can be fully realised without any cuts in the field. The ministry emphasised three main expectations from industry players. First, gas distribution through the AGIT scheme must be fulfilled 100 percent in accordance with regulations, without curtailment. Second, the allocated gas volume must not be reduced unilaterally, as this would directly impact production capacity and factory efficiency. Third, energy supply certainty must be maintained to enhance the competitiveness of Indonesian products in both domestic and export markets. “Industry players hope that what has been decided by the government regarding AGIT can be fully realised in the field. There should be no cuts or reductions in volume, because any supply decrease will directly correct manufacturing productivity,” Febri stressed. The ministry stated it will continue to oversee the results of coordination with the DPR and relevant ministries and agencies to ensure gas supply for industry is maintained. This step is considered important to create a stable and conducive business climate while boosting the competitiveness of the national manufacturing sector. The government decided to lower the price of LNG for the industrial sector to US$13 per MMBTU from the previous range of US$20-23 per MMBTU as a measure to maintain national industrial competitiveness and prevent layoffs. The policy was adopted after the government responded to industry players’ aspirations amid rising global gas prices that burdened production costs. Energy and Mineral Resources Minister Bahlil Lahadalia stated at a press conference at the Parliament Complex in Jakarta on Monday that the decision was the result of intensive coordination between the government and the DPR in addressing global geopolitical dynamics affecting the national gas sector.