MEMR: Use household gas network to reduce LPG consumption

Jakarta – The Ministry of Energy and Mineral Resources (ESDM) plans to increase the use of gas networks (Jargas) in households to reduce LPG consumption, which continues to increase yearly. This plan will utilise State Budget funds that have previously been set aside.

Minister of Energy and Mineral Resources Arifin Tasrif revealed that in addition to reusing the state budget, the government will also encourage private business entities (PPP) to play a role in providing household Jargas infrastructure. According to him, supporting regulations to encourage private involvement in this project are being drafted.

The government, he added, is also planning a revision to Presidential Regulation (Perpres) No. 6/2019 on the Supply and Distribution of Natural Gas through Natural Gas Transmission and/or Distribution Networks for Households and Small Customers. “The revised Perpres can optimise business entities (PPP) so that it can work,” Tasrif said.

To fulfil the high demand for funds to build household Jargas infrastructure, the government had hoped that business entities would be active in providing the infrastructure. However, the unsatisfactory response from business entities prompted the government to step in.

With the use of the state budget and the application of competitive tariffs, the government hopes that the target of increasing the use of Jargas can be achieved. According to Mr Arifin, non-tax state revenue (PNBP) from the energy sector has experienced significant growth in recent years, mainly thanks to rising mining commodity prices.

The government will also set a special price for Jargas gas, which is USD 4.72 per MMBTU. The government’s target for next year is to reach 2.4 million gas network connections. Currently, the number of Jargas connections financed by the state budget and business entities, such as PGN, is around 800,000. (Hartatik)

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