"The only way to lower the prices is through competition, not always understood as a monopoly, or through smaller private players," Sammy Hamzah said.
Jakarta (ANTARA News) - Domestic oil and gas prices could be lowered by encouraging fair competition and better coordination by the government, Sammy Hamzah, chief of the Indonesian Employers Association (Apindo) for energy and mineral resources, said.

"The only way to lower the prices is through competition, not always understood as a monopoly, or through smaller private players," Sammy Hamzah said in a seminar on state-run energy holding company here on Thursday.

Commenting on the governments plan to establish a holding company of Pertamina and PGN, Sammy said that he had no idea if the aim of the plan was to strengthen Pertaminas balancing sheet to fund its energy project, which would need a huge capital.

According to Sammy, it was clear that the initial aim of a review of the history of Pertamina and PGN establishment was related to the division of upstream, midstream and downstream businesses.

The real problem in Indonesias gas industry was an overlapping of tasks that has led to inefficiency. Therefore, he called for a review of the planned energy holding companies.

He also said that state-run energy companies should focus on its investments in infrastructure of gas distribution such as gas pipelines and power transmissions, which have relatively low investment returns and hardly find private investors.

However, with such infrastructure, many investments in both upstream and downstream industries would lead to a higher economic value and thus create a double impact on the local community.

In addition, state-run energy companies play an important role in drawing up long-term strategies to master the technology and capability to manage energy resources; thus, in the future, it is possible to avoid reliability on other countries.

The plan to establish a holding of state-run companies is expected to ease its corporate operations and avoid any barriers in bureaucracy.

"I think (state-run holding company) is good for the government on one hope that our state-run companies could be more professional and more corporative than bureaucratic ones," Eka Sastra, a member of Commission VI of the House of Representatives, said.

He said that under the holding company, state-run enterprises could run their business corridors smoothly without any intervention.

The Golkar politician said that state-run companies in other countries have already become the worlds main players after they established a super holding company that could improve the business for public interest.(*)

Editor: Heru Purwanto
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