Jakarta – The government has ensured that the specified natural gas price (HGBT) policy will continue this year, providing a positive signal for the national industry and economy. This decision is expected to strengthen the competitiveness of domestic industries and attract more investment in the manufacturing sector.
Industry Minister Agus Gumiwang Kartasasmita emphasised that the HGBT policy significantly impacts economic growth. “Since its implementation in 2020, HGBT has provided economic benefits of Rp 247.26 trillion, consisting of an increase in exports of Rp 127.84 trillion, an increase in tax revenue of Rp 23.3 trillion, and a reduction in fertiliser subsidies of up to Rp 4.94 trillion,” Agus said in an official statement, Tuesday, January 28.
The sustainability of the HGBT is considered a strategic step in achieving the economic growth target of 8 per cent in President Prabowo Subianto’s administration, with the manufacturing sector targeted to contribute 21.9 per cent to the national GDP for the 2025-2029 period.
Based on data from the Ministry of Industry, the non-oil and gas processing industry remains the main contributor to national GDP, with a contribution of 17.18 per cent and growth of 4.84 per cent in the third quarter of 2024. The total export value of this industry reached USD 196.55 billion, or 74.25 per cent of total national exports.
In addition, investment in the non-oil and gas industry sector was recorded at IDR 515.7 trillion, equivalent to 40.9 per cent of total national investment. This sector also absorbed a workforce of 20.01 million people.
“The sustainability of the HGBT policy is crucial so that the domestic industry continues to develop, increase production, and create more jobs,” Agus said.
According to the Decree of the Minister of Energy and Mineral Resources Number 255K of 2024, seven industrial sectors receive HGBT facilities, namely the fertiliser industry (4 companies), petrochemicals (56 companies), oleochemicals (10 companies), steel (67 companies), ceramics (69 companies), glass (18 companies), and rubber gloves (4 companies), with a total of 228 recipient companies and a quota of 890.24 BBTUD.
However, the realisation of natural gas absorption in 2023 only reached 80.10 per cent. Agus explained that some industries reduced gas use due to the application of surcharges by suppliers as well as gas quotas imposed by the HGBT. “When the quota runs out, the gas price returns to the market price, which makes the industry have to adjust its gas usage,” he said.
Despite its great benefits, the HGBT policy still faces many obstacles. One is the price of regasified gas offered by PT Perusahaan Gas Negara (PGN), which reaches USD 16 per MMBTU-about 2.5 times the set HGBT price.
In addition, there are quota restrictions calculated daily or monthly, as well as the imposition of a surcharge when the quota runs out. “In 2024, the HGBT quota for the western Java region will only be 60 per cent of the contract, so the industry will have to adjust their gas consumption,” Agus explained.
Also, some companies designated as HGBT recipients have not received gas supplies as needed, such as PT Pupuk Iskandar Muda (PIM), which should have received 40 BBTUD.
Agus emphasised that more than 95 per cent of HGBT recipient industries continue to pay gas prices above the regulation, above USD 6.5 per MMBTU. “We continue to encourage this policy to be more effective and provide maximum benefits for the industry,” he said.
To ensure the effectiveness of this policy, the Ministry of Industry proposes that HGBT for industry is no longer associated with the fertiliser and electricity sectors. “Fertilizers already receive price subsidies and electricity, which receives energy subsidies. If it is still bundled, this will affect the calculation of the average gas price and harm the industry,” said Agus.
He also emphasised that the government should see the HGBT policy as an economic driver, not just a burden on state finances. “Indeed, state revenues from gas are reduced, but the added value generated by the industry is much greater. The benefits can reach six times through taxes and exports,” he concluded. (Hartatik)
