Gas prices in Indonesia are very expensive. Currently, the average gas price at the wellhead (the point of delivery after oil and gas wells) is around US $ 6-8 per million British thermal units (MMBTU), depending on the type of field. This is what is suspected to be the cause of the high prices of industrial products.
The Minister of Industry stated that the price of industrial gas should fall to US $ 5 per MMBTU. Finally, at the closed cabinet meeting on October 4, 2016. President Jokowi requested that the price of industrial gas be reduced to US $ 6 per MMBTU within two months. Is the President's desire to reduce gas prices realistic?
This article intends to look at the current state of the domestic gas industry and propose how to manage the gas trade system policy in the short and long term so that gas prices are affordable to the public in accordance with the government's Nawacita (9 Ideal) program objectives. The national gas supply is obtained from within the country and imports.
From within the country, generally obtained from the production of Production Sharing Contracts (KBH) of oil and gas. The cost of producing gas from the field to the wellhead will affect the price of gas. Plus processing, storage and transportation costs, the price of industrial gas is obtained. Gas prices are also influenced by fluctuations in the global Crude Oil Price (HMM) and the index of gas prices abroad.
If the HMM goes up, the gas price will also go up. Based on the provisions of the Oil and Gas Law, all gas resources are owned by the state up to the wellheads. The government sets the industrial gas price based on its upstream and downstream production costs. In theory, the government also has the right to market gas products at prices that are favorable to the state.
However, the fact is, the government cannot set the gas price independently, but is influenced by the production cost assumption proposed by the contractor. This assumption does not necessarily reflect the true cost because the contractor never wants to disclose production costs. Contractors tend to increase production costs to get compensation through the Cost Recovery (CR) mechanism. This is one of the factors causing the high gas prices.
By considering the above, the government can actually establish several policy strategies to get gas prices in the range of US $ 6 per MMBTU. First, the government directly sets the gas price at wellheads from old field production at US $ 4 per MMBTU.
Old field costs are generally low because all investment costs have been reimbursed through Cost Recovery. Second, reducing the government's share in KBH, such as the share of the results (split), the share of oil and gas for the state (first trench petroleum), or the share of other taxes. The goal is to reduce production costs and get a fair gas price. This scenario must be done with care. because any decrease in state income can be interpreted as a form of state loss (corruption).
It is recommended that this policy be established through a presidential decree / regulation. Third, prepare a subsidy policy on gas prices. This kind of subsidy is also carried out by the governments of Malaysia and Singapore. Fourth, establishing a gas import policy which is currently cheaper to lure domestic gas prices down.
In the long term, the government is obliged to set a gas price policy based on the independence of the nation. Several strategies can be done. First, creating a National Gas Price Index (IHGN) so that the government can set industrial gas prices independently. This can be done in two stages.
Blogger Agus Purnomo in SKK Migas
Second, to carry out the separation of upstream and downstream business activities consequently (unbundling). The Oil and Gas Law explicitly stipulates that upstream and downstream business activities must be separate. In practice, these two activities are mixed. For example, SKK Migas in charge of supervising upstream activities is still involved in recommending industrial gas prices, which should be the authority of BPH Migas. This mixing of business activities is the reason for the high price of gas.
Koran Tempo, Page-11, Wednesday, Oct 19, 2016
No comments:
Post a Comment