PGN ready to implement LNG price reduction policy
PT Perusahaan Gas Negara (PGN) has stated its readiness to implement the policy of reducing liquefied natural gas (LNG) prices for industries, aiming to help maintain competitiveness and ensure the continuity of jobs in Indonesia.
“PGN expresses its appreciation to the Government, particularly the Ministry of Energy and Mineral Resources (ESDM), for establishing a national natural gas pricing governance policy that considers the interests of all stakeholders fairly,” said PGN President Director Arief K. Risdianto, as quoted from the official website of the Ministry of Energy and Minseral Resources (ESDM) accessed in Jakarta on Monday.
As Pertamina’s Gas Subholding and a major gas distribution and trading entity, PGN fully supports the policy and is prepared to implement all provisions set by the Ministry of ESDM.
“We will continue to ensure that the natural gas supply remains reliable, safe, and sustainable to support industrial competitiveness, strengthen national energy security, and provide benefits to the economy and the community,” added Arief.
The Ministry of ESDM is preparing comprehensive measures to meet domestic natural gas needs with competitive pricing for national industries. Currently, industrial gas requirements are met through three main categories: Specific Natural Gas Prices (HGBT), non-HGBT pipeline gas, and non-HGBT LNG.
Consequently, adjustments are being made proportionally according to the supply characteristics, cost structures, and needs of each industrial segment. HGBT gas prices remain in accordance with Government regulations, specifically $6.50 per MMBTU for gas used as raw material and $7.00 per MMBTU for gas used as fuel.
For non-HGBT pipeline gas in the West Java region, the Government ensures that the selling price at the customer level will not increase, averaging $9.60 per MMBTU. Regarding LNG-based supply, the Government has noted the rise in LNG prices resulting from crude oil price fluctuations. Since one of the price components of LNG is linked to crude oil, an increase in oil prices directly impacts LNG acquisition costs.
Therefore, for non-HGBT gas needs sourced from LNG, the Government is preparing a price reduction scheme. The price of non-HGBT LNG for end consumers in the West Java, Banten, and Jakarta regions, which currently sits around $20.57 per MMBTU, will be reduced to $13 per MMBTU.
“Based on the President’s directive, as the President is very interested in protecting industry and jobs, we were instructed by industry feedback that the requirement was approximately $15 to $16 per MMBTU. However, after our calculations and presentation to the President, (the LNG price) has been lowered to $13 per MMBTU,” said Minister of ESDM Bahlil Lahadalia.
This policy represents the Government’s commitment to maintaining a balance between gas affordability for industry, supply certainty, the sustainability of national gas management, and the long-term competitiveness of domestic industries to create broader economic impacts, including job creation.