The Ministry of Energy and Mineral Resources of Indonesia has introduced a US$6/MBtu cap on the gas price for seven energy-intensive industries, namely fertilisers, petrochemical, oleochemical, steel, ceramics, glass, and rubber gloves. The industries, which currently purchase gas from the state-owned gas utility PT Perusahaan Gas Negara (PT PGN) between US$7/MBtu and US$10/MBtu, will benefit from the measure, while those having secured lower prices will continue to pay less than US$6/MBtu. The price cap took effect retroactively on 6 April 2020. It is expected to accelerate economic growth and improve the competitiveness of national industries. A wider gas pricing policy for all industrial consumers is under consideration.
In March 2020, the government announced plans to cap the price of gas sold to the national power utility PT Perusahaan Listrik Negara (PLN) at maximum of US$6/MBtu, against a current price of US$8.4/MBtu. The objective was to cut subsidies the government must pay to the state-owned utility, for which it set aside IDR54,800bn (US$3.8bn) in 2020. PLN’s total fuel expenditures are estimated at IDR146,670bn (US$10.3bn) in 2020, with 38% of it for natural gas.