Indonesia Caps Gas Price for Power Plants

Indonesia’s energy and mineral resources ministry April 27 said it has passed a new regulation to cap gas price for power plants at $6/mn Btu.

The new regulation came into effect from April 7 and will apply to state-run utility Perusahan Listrik Negara and independent power producers, the ministry said. Any additional supply costs that may appear will be borne by the government.

In case the price of natural gas at the power plant is higher than $6/mn Btu or natural gas comes from LNG or compressed natural gas, the ministry shall determine the price of natural gas based on the price paid to the contractor as well as the distribution and transportation costs.

Earlier this month, the ministry capped gas prices for seven industries in order to encourage economic growth and increase competitiveness. The ministry has set the price of gas at $6/mn Btu for the fertiliser, petrochemical, oleochemical, steel, ceramics, glass and rubber gloves industries.