Natural gas is projected to be the driving force for the revival of the Indonesian economy. However, currently, the price of gas consumed by the public is still considered expensive. In order to lower gas prices, efficiency measures in the upstream sector continue to be accelerated along with cutting long distribution chains.
Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Amien Sunaryadi said that natural gas sources in Indonesia are still abundant. This abundant wealth must be managed properly through efficiency efforts in the upstream sector.
"The efficiency effort must first be made in all operations in the upstream oil and gas sector to obtain cheap gas prices for industry and society,". Amien hopes that efficiency can be applied massively in various integrated oil and gas projects.
One of the concrete steps is to increase the level of domestic content (TKDN) and expand the role of vendors from Indonesia to take part.
"This step can create extraordinary savings and at the same time prove that domestic products are able to compete. So far, contracts for integrated area development are expensive, so the costs are high. Another effort that can be done is to reduce state revenue from the oil and gas sector so that non-tax state revenue (PNBP) can be reduced starting this year. So far, PNBP in the oil and gas sector has contributed up to 6% to the state treasury.
"But that is the responsibility of the Minister of Finance. Hopefully this can be done to realize a cheap gas selling price, ".
President Director of Pertamina Hulu Energi (PHE) Gunung Sardjono Hadi said that the distribution chain has been very long. All of that must be cut to cut gas prices to consumers.
"For gas distribution, the business chain is very long, because there is a producer distribution chain. Hence, this distribution chain must be trimmed. The government's move to zoning gas is also very good for determining cheap gas prices, ".
Member of Commission VII DPR, Satya Widya Yudha, explained that it takes a concerted effort to reduce gas prices. Cheap gas prices can be obtained if the government fixes the upstream oil and gas contractor contracts. All improvements in the upstream sector are very important because they provide gas sources for industry and households.
According to him, the implementation of a sliding scale profit-sharing scheme can be done. When the world oil price rises, the government benefits. On the other hand, when the world oil price falls, state revenues can decrease so that there are developments that are carried out every year.
"This scheme allows production in the oil and gas field to be more economical.
The gas infrastructure has improved every year. This is a good opportunity to maximize the gas potential for industry and households. The government wants to reduce the gas price for industry, which is still around USD 9.5 per Million Metric British Thermal Unit (MMBTU) to be able to compete with other countries, especially in ASEAN.
Currently, gas prices in Indonesia are much more expensive than in several other countries in ASEAN. In Vietnam, gas prices are around USD 7 per MMBTU, in Malaysia USD 4 per MMBTU, and in Singapore USD 4 per MMBTU, East Java Governor Soekarwo said, the use of natural gas is currently increasingly massive.
Many industries and small businesses are starting to use natural gas as part of their business production. If the price of gas for the industry is still high, according to him, domestic products will be less competitive with foreign products.
"Competition for products is becoming more and more competitive. One of them must be to be creative and have price competitiveness in sales.
Koran Sindo, Page-19, Wednesday, Oct 19, 2016
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