PGN ready to implement LNG price reduction policy

PT Perusahaan Gas Negara (PGN) has stated it is ready to implement the policy of lowering liquefied natural gas (LNG) prices for industry, in a bid to help maintain competitiveness whilst ensuring the sustainability of employment in Indonesia. PGN expressed appreciation to the Government, particularly the Ministry of Energy and Mineral Resources, for establishing a national gas price governance policy that has fairly considered the interests of all stakeholders, according to PGN President Director Arief K. Risdianto. As a Subholding Gas of Pertamina and a gas distribution and trading entity, PGN fully supports the policy and is prepared to implement all provisions set by the Ministry of Energy and Mineral Resources. ‘We will continue to ensure that the gas supply remains reliable, safe, and sustainable to support industrial competitiveness, strengthen national energy security, and provide benefits for the economy and the public,’ Arief said. The Ministry of Energy and Mineral Resources has prepared comprehensive measures to meet domestic natural gas needs competitively for the national industry. Currently, industrial gas needs are met through three main categories: Specific Natural Gas Price (HGBT), non-HGBT pipeline gas, and non-HGBT LNG. The resolution is carried out proportionally according to the characteristics of supply, cost structure, and the needs of each industrial segment. The HGBT price remains in accordance with government provisions, namely US$6.5 per MMBTU for gas used as feedstock and US$7 per MMBTU for gas used as fuel. For non-HGBT pipeline gas in the West Java region, the government has ensured that the selling price to customers will not increase, remaining at an average of US$9.6 per MMBTU. For LNG-based gas supply, the government has observed a price increase as a result of crude oil price fluctuations. One component of the LNG price is linked to crude oil prices, so when oil prices rise, the acquisition cost of LNG is also affected. Therefore, for non-HGBT needs sourced from LNG, the government has prepared a price reduction scheme. The price of non-HGBT LNG at the end-consumer level in the West Java, Banten, and DKI Jakarta regions, which was in the range of US$20.57 per MMBTU, will be lowered to US$13 per MMBTU. Minister of Energy and Mineral Resources Bahlil Lahadalia stated that the policy is a form of government presence in maintaining a balance between affordable gas prices for industry, supply certainty, and the sustainability of national gas management, as well as sustainable domestic industrial competitiveness that provides a broader economic impact, including job creation.