Importing gas will not help deal with rising prices

The Energy and Mineral Resources Ministry has stated that the proposal of the Indonesian Petroleum Association (IPA) to import gas will not help the governments effort to curb gas prices applicable to the industry.

The proposal is one of the many options to cut gas prices for industries, Director General of Oil and Gas at the Energy and Mineral Resources Ministry, IGN Wiratmaja Puja, said here on Monday.

“There are many options to bring down the gas prices, from upstream, midstream to downstream levels. But we have to look at the data in detail,” he noted.

Purchasing gas from other countries will not significantly affect the global gas prices, he added.

If Indonesia intends to import gas, it must be far cheaper than the locally produced gas. In addition, the nation must also consider additional charges accrued in transporting gas from abroad and the cost to change it into liquefied natural gas (LNG), he reminded.

“Admittedly, when bought from Qatar, gas will be slightly cheaper, but if the cost of transportation is added to the price, then it will not be much different from that of local gas. The US gas is currently being sold at US$2.5 per mmbtu but we need to study the cost to change it into LNG to facilitate its shipment to the rest of the country. Clearly, it will not be able to help us very much,” he pointed out.

He underlined that the policy to import gas must consider the situation on the domestic production front. The concept of supply and demand will prevail. Besides, the policy gas import will not be allowed in case of overproduction.