"When gas has a major portion in production cost structure, then the price will significantly affect the competitiveness of our products in the world market. We lose the competition because of the high gas price," the President said at the cabinet session on gas adequacy for industry here on Monday.
Gas should not only be seen as a commodity but as a capital of development that would also strengthen the national industry, according to Jokowi.
Six industries relied on domestic gas production namely power generator, chemical industry, food, ceramic, steel, and fertilizer industry, the President said.
The President has ordered ministries and state enterprises to calculate the gas price for the industry that could boost the competitiveness of domestic products.
"Let us see thoroughly the cause of the high gas price, from its upstream sector in the gas field to channeling cost, transmission cost, and to its downstream sector at the level of the distributor," Jokowi noted.
The President has also asked for reports on the implementation of Presidential Regulation no. 40/2016 on the natural gas price to study the potential hindrance to the industry.
In October 2019, the government aborted the proposal of PT Perusahaan Gas Negara Tbk to increase the gas prices for the industrial sector. Earlier, the state-owned producer and distributor planned to implement the new prices on Nov 1, 2019.
At present, the selling price of gas for the industry is around US$7 – $10 per MMBTU.
