Regulations
An inherent supply-demand gap in the HGBT policy and a disconnect in the domestic supply chain are just a couple of issues that the government must address to ensure sustainability in the long term, says a forum for industrial LPG customers.
A worker manages a production line on April 1, 2011, at a factory of ceramics company PT Arwana Citramulia in Serang, Banten. (Antara/Rosa Panggabean)
Manufacturers are warning that the government's much-publicized move to slash prices of liquefied natural gas (LNG) for industry may prove to be more promise than relief, as stagnant supplies and declining production could leave factories struggling to secure enough fuel.The warning from industry representatives and energy analysts alike came after Energy and Mineral Resources Minister Bahlil Lahadalia lowered the LNG price ceiling for industrial consumers from US$23 to $13 per metric million British thermal unit (MMBtu), effective June 29.
The price cut, which was achieved by compressing margins from the upstream to the downstream, aims to provide immediate cost certainty for domestic manufacturers. Yet industry players say price relief means little without guaranteed supply access.
