Minggu, 07 Desember 2014

GOVT GAINS MOMENTUM TO PROMOTE USE OF GAS

 By Andi Abdussalam   
          Jakarta, Dec 7 (Antara) - The recent government's decision to raise subsidized fuel oil prices virtually earns it a momentum to promote its oil-to-gas conversion program for transportation as it creates a big margin between gas and fuel oil prices.
         "The price per liter of premium (gasoline) equivalent gas is only Rp3,100, far lower than the price per liter of premium gasoline sold at Rp8,500 and that of diesel oil at Rp7,500. With a far price difference, consumers will be attracted to use gas for their vehicles and that gas will become an alternative energy for the people," Irwan Andri, the spokesman of state-owned gas distributor firm PGN, said on Sunday.
         Therefore, the PGN is ready to help the government develop and promote the use of gas in the transportation sector and is ready to increase the number of its gas refueling stations (SPBG) to support the government's fuel oil-to-gas conversion program.
         Irwan Andri said his company was optimistic that fuel oil-to-gas conversion would develop following the government's decision to raise subsidized fuel prices on November 18, 2014.
         "The increase in the fuel oil prices will encourage consumers to switch to using gas," he said.

 
         On November 17, 2014, President Joko Widodo announced the increase in the price of premium gasoline to Rp8.5 thousand per liter from Rp6.5 thousand and that of automotive diesel oil to Rp7.5 thousand per liter from Rp5.5 thousand.
         Following its oil price increase announcement, the government was immediately called on by observers to implement soon its oil-to-gas conversion program for transportation. "The fuel oil price hike is a momentum for the government to immediately and seriously continue implementing its oil-to-gas conversion program," energy observer Komaidi Notonegoro of the ReforMiner Institute, said.
         He said the government could seriously develop its gas for transportation program with a clear target such what it had done in the past when launching the kerosene-to-gas (liquefied natural gas) conversion program.
         Pri Agung Rakhmanto, Komaidi's colleague, also voiced the same expectation.  He said that the government of Joko Widodo - Jusuf Kalla should keep its promise. When they campaigned they promised that they would implement the oil-to-gas conversion plan.
         "The implementation of the gas conversion program is a must," said Pri Agung.
         This program if implemented will reduce the importation and the use of fuel oils while at the same time reduces subsidies which so far are considered to have burdened the state budget.
         After all, gas is Eco-friendlier compared to fuels. Admittedly, businesses lack interest in investing on this sector, yet the government could offer certain incentives to attract them, Komaidi argued.
         Komaidi said the first step that the government could take to attract the interest of state-owned and privately run enterprises is to raise gas price.
         The price increase of premium gas to Rp8,500 per liter makes it possible for  the government to raise the gas price. The price per liter of premium equivalent gas which is set at Rp3,100 is less attractive to investors. 
    "Investors see that the Rp3,100 price is not attractive enough," he said adding that the government can consider raising it to Rp5,000  per gasoline equivalent liter gas. I think this rate is a moderate increase as compared to the premium gasoline price of Rp8,500 per liter," said Komaidi.

         The price of Rp5,000 is attractive enough to businesses while on the other hand it is acceptable to consumers.
         "Private companies can get incentives if they involve in the development of gas development for transportation," he added.
         In the meantime, Transportation Minister Ignasius Jonan suggested that foreign investors could also be involved in the oil-to-gas conversion development program. 
    "State-owned oil/gas firm Pertamina and Royal Dutch Shell can build gas refueling stations (SPBG)  so that it will be easy for consumers to refuel their vehicles," remarked Minister Jonan in a discussion with reporters at the Transportation Ministry Building recently.

         In this case, the minister however suggested that the Ministry of Energy and Mineral Resources and the National Energy Council (DEN) should discus it.
         "We have to sit together with  the Ministry of Energy and Mineral Resources, the Ministry of Finance, the Ministry of Industry, the Ministry of Transportation and the National Energy Council to discuss the matter," he said.
         However, according to Haryajid Ramelan, the chief of the Indonesian Stock Analysts Association (AAEI), the PGN plays an important role in supporting the government's oil-to-gas conversion program.
         "As a gas distributor, PGN plays an important role in supporting the program. Furthermore, the company has good infrastructure," Haryajid stated at a seminar titled "The Disappearance of Fuel Subsidy and Its Impact on Gas Industry in the Eyes of Market Agents" in Bandung, West Java, on Friday. 
    The oil-to-gas conversion program could also save state budget funds, he observed.

         "The declining fuel subsidy will improve the state budget," he added.
         The national gas production currently stands at some three trillion cubic feet per day. This high gas production may serve as one of the reasons for the government to support its future energy policy, he noted.
         With regard to the PGN role, the PGN spokesman, Irwan Andir, said his company was ready to increase the number of its gas refueling stations (SPBG) to support the government's fuel oil-to-gas conversion program.
         Irwan explained that PGN would carry out two ways in increasing the number of its SPBGs. Firstly; it will develop an online pipe distribution and a mobile refueling unit (MRU) systems.
         Currently, the PGN has three units of SPBGs consisting of three online stations operating in Ketapang (West Kalimantan), Bekasi and Bogor (West Java) and four MRU operating in the National Monument area, Pluit dam, Cawang and Cengkareng (Jakarta).
         The other SPBGs which will operate soon this month (December) are located in Surabaya (East Java) and Cilegon (Banten).  "We supply gas to SPBG partners in Jakarta," Irwan stated.
         Later, he said, his company is planning to expand the areas of its coverage by developing additional SPBGs in a number of regions such as Jakarta, Bogor, Bekasi (West Java), Surabaya (East Java), Cilegon (Banten) and Batam (Riau Island).
         Secondly, the PGN will increase the number of its SPBGs by developing integrated stations with public fuel refilling stations (SPBU), he said.
         Irwan said that PGN is ready to partner with the owners of SPBUs whose locations are near to PGN's gas pipeline distribution networks.
         "Currently, there are 73 SPBUs in Jakarta whose locations are near to PGN's pipeline distribution networks. Later, PGN will install gas dispenser facilities at the SPBUs so that consumers can refuel gas there," the PGN spokesman stated.***2***
(T.A014/b003/B003)


(T.A014/A/A. Abdussalam/Bustanuddin) 07-12-2014 17:24:

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