Energy observer from Gajah Mada University (UGM) Fahmy Radhi assessed that the performance of the Upstream Oil and Gas Regulatory Agency (BPH Migas) was still not optimal. The performance of BPH Migas has not been maximized, both in terms of developing natural gas pipelines and other fields.
According to him, the lack of availability of gas pipes for both industry and urban communities is an indicator that BPH Migas' performance is indeed declining. The former member of the Oil and Gas Governance Reform Team also noted that in the implementation of the gas pipeline auction, BPH Migas was unable to encourage the participation of gas traders. In fact, BPH Migas cannot do anything when a company wins the auction but has not built the pipeline for years," he said.
Therefore, he suggested, the authority of BPH Migas should be returned to the Directorate General of Oil and Gas, Ministry of Energy and Mineral Resources. Fahmy also argues, given the importance of procuring gas pipelines as well as accelerating their development, the government can directly appoint a State-Owned Enterprise (BUMN), PT. The State Gas Company (PGN) builds gas pipelines for both industrial and urban areas with their own investment costs.
In return, PGN as a state-owned company is given a natural monopoly right to distribute industrial gas at a price set by the government," he said.
Furthermore, if the gas pipeline is "mature" and reaches all industrial consumers, then gas distribution can be opened. Previously, businessmen in Central Java province complained about the lack of gas pipeline infrastructure in their area. The chairman of the Indonesian Employers' Association (Apindo) of Central Java, Frans Kongi, said that his party had been waiting for natural gas supply through pipelines like other regions for decades.
According to him, if East Java, West Java, and DKI Jakarta have long enjoyed gas fuel through cheap and clean pipelines, Central Java has not.
"About 15-20 years ago, the Ministry of Energy and Mineral Resources once surveyed the industry to supply gas via pipelines, but until now this has not been realized," he said.
Of the approximately 1,300 members of Apindo Central Java, hundreds of entrepreneurs are already waiting and ready to receive supplies of natural gas fuel. He gave an example, in Semarang and its surroundings alone, there are 100-200 entrepreneurs who are ready to receive gas supplies through pipes. Not to mention the addition of entrepreneurs in Solo, Kudus, and the Kendal Industrial Estate (KIK) which was just inaugurated by President Joko Widodo," he said.
If the pipe has passed through the factory, it is certain that the entrepreneur will want to use natural gas. Frans also said that piped gas fuel is much cheaper than oil, so industrial products produced can be cheaper and will certainly increase competitiveness with other regions.
Plus, natural gas is cleaner than oil, so it's environmentally friendly," he said.
In terms of expenditure costs, according to him, the fuel component ranks second after raw materials. Thus, if the industry gets cheap fuel such as gas, the resulting product will be more competitive in the face of market competition.
Investor Daily, Page-9, Friday, Dec 2, 2016
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