Despite declining state revenue, industry-specific gas prices to stay the course

Jakarta – Despite the impact on the loss of state revenue, the adjustment of certain natural gas prices (HGBT) of USD 6 per MMBTU in the industrial sector will continue. The Ministry of Energy and Mineral Resources (ESDM) noted that state revenue fell by Rp 29.39 trillion.

“The loss of state revenue occurs in the upstream oil and gas sector, due to the adjustment of natural gas prices after calculating the share of oil and gas production between the government’s share and the contractor,” said Director General of Oil and Gas, Tutuka Ariadji, in a hearing with Commission VII of the House of Representatives in mid-April.

According to him, in implementing the gas price incentive policy for the seven industrial sectors, the government can only sacrifice part of the state revenue, because the government has committed that the contractor’s portion will not change.

Ariadji said, on the condition of the lost state revenue, the Ministry of Energy and Mineral Resources has submitted an adjustment of state revenue on the application of HGBT. In the submission, the Minister of Finance has also responded to the adjustment of state revenue in accordance with the adjustment of HGBT revenue.

Tutuka revealed that the incentives stipulated in Presidential Regulation 121/2020 aim to help industries that need help, so this cheap gas incentive is temporary.

“If there are industries that have improved compared to before, they need to be evaluated and replaced with new industrial sectors that are still weak,” he added.

The government will also evaluate the implementation of a certain gas price policy of USD 6 per MMBTU, as stipulated in Ministry of Energy and Mineral Resources Decree 134 of 2022. This evaluation of cheap gas price incentives must be in line with the improvement of the recipient industry such as increased employment, factory utilization, and tax contributions to the state. (Hartatik)

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