State-owned enterprises in the gas transmission and distribution business have tried to reduce gas prices, including gas for the industry. The decline in gas prices is highly dependent on the location and condition of drilling wells as well as gas transmission and distribution lines.
According to the Deputy for Energy, Regional Logistics, and Tourism at the Ministry of SOEs, Edwin Hidayat Abdullah, downstream gas prices have been cut a lot. He gave an example, the price of gas in North Sumatra has fallen from an average of 12 US dollars per million British thermal units (MMBTU) to below 10 US dollars per MMBTU.
State-owned companies engaged in the supply chain, namely gas transmission, and distribution, have cut their profit margins. In Lampung, PGN also lowered the selling price from 9.8 US dollars to 8 US dollars per MMBTU. The price of gas said Edwin, really depends on the location of the gas source or gas well and the length of the transmission and distribution pipeline. The upstream price component also needs to be looked at.
There are still several components that determine gas prices, such as taxes and toll fees set by BPH Migas. Vice President Corporate Communications PT. Pertamina Wianda Pusponegoro said that there are several gas price structures that reach consumers. In the upstream sector, the price of gas, including the price of liquefied natural gas, is set by the government with reference to international prices.
The cost of regasification is influenced by the amount of investment, operating and maintenance costs, and profit margins. In the downstream sector, transportation costs via transmission pipelines are also influenced by the 3 percent BPH Migas contribution, taxes, investment costs, and operational and maintenance costs. Gas distribution through the pipelines to end-users is also determined by profit margins, taxes, and operating and maintenance costs. To reduce gas prices, regulations are needed to regulate profit margins.
Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, I Gusti Nyoman Wiratmaja, said that efforts to streamline supply chains require gas traders or traders to build infrastructure. They are given the opportunity until 2018 which is called the transition period.
In one distribution network, the gas pipeline network may consist of several layers of traders. Because every trader makes a profit, the price of gas to the final consumer is high. The government is trying to regulate it by revising the Regulation of the Minister of Energy and Mineral Resources Number 6 of 2016 concerning Provisions and Procedures for Allocation and Utilization, as well as Natural Gas Prices.
PT PGN Batam Area Sales Head Amin Hidayat said the method of delivery and the number of parties involved were important factors in determining gas prices. Pipeline delivery from source to the user is the cheapest method to date. According to Amin, Batam is a lucky area.
The city can get gas supplies through pipes from the source to the end-user. Batam's gas pipeline network has reached all strategic points. Deputy Chairperson of the Upstream and Petrochemical Industry Committee at the Indonesian Chamber of Commerce and Industry (Kadin) Achmad Widjaja argued gas user industries as buyers did not question how many traders were involved in the gas supply chain. For industry, the most important thing was that gas prices were still economically acceptable. industry.
The government, in this case, the Minister of Finance, should decide whether it still wants state revenues in the upstream oil and gas sector or not? If you want to reduce it so that gas prices can go down, you have to make sure how much the reduction will be. That way, the decision to reduce prices will not be protracted.
Chairman of the Association of North Sumatran Gas User Companies, Johan Brien, assessed that the gas trading chain is too long, causing the gas price to be very high to consumers. From the start, the policy of developing gas infrastructure in North Sumatra was criticized because it was deemed not pro-industrial. There are at least five companies that manage gas, starting from the Tangguh Block in West Papua, to Medan in North Sumatra.
Kompas, Page-20, Wednesday, Oct 26, 2016
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