Government should review energy prices: Apindo

Government should review energy prices: Apindo

Illustration - Gas pipe. Antara Foto / Aji Styawan

Jakarta (ANTARA) - The government should review the prices of industrial fuels, electricity and gas for businesses given the huge impact of the COVID-19 pandemic on the national economy, the Indonesian Employers Association (Apindo) said.

"The high prices of  these commodities are considered very burdensome to the business world, coupled with the weakening of the national economy due to the impact of the COVID-19 pandemic," Apindo Chairman Hariyadi B. Sukamdani said in a statement in Jakarta on Sunday.
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According to Hariyadi Sukamdani, the government is expected to reduce the prices of fuel, electricity and gas amid the sluggish Indonesian economic conditions.

In addition, he said, the current pandemic is considered to have reduced the competitiveness of national industries because demand for goods at   domestic and foreign markets has also declined.

"The high price of fuel in Indonesia as the main raw material for industry makes the competitiveness of the national industry low. Moreover, global crude   prices have also declined below US $ 20 per barrel amid the COVID-19 pandemic," he said.

Apindo highlighted the importance of ensuring business continuity amid the current economic downturn due to COVID-19.

He argued that business continuity can be pursued by, among others, reducing the price of industrial fuel as a production efficiency.

Apindo highlighted the premium electricity tariffs that were fully charged to the business world, while a number of industries did not currently operate 100 percent.

Therefore, Apindo proposed elimination of a premium-account fee for minimum electricity usage for 40 hours, including for customers of the 235 hours premium industry that light up during the pandemic.

Apindo also proposed the elimination of the gas minimum bill mechanism by PGN, which would greatly ease the burden on industrial costs.

The industry gained flexibility to pay for energy in accordance with gas consumption that follow usage in the manufacturing process.

In addition, Apindo proposed the deferred payment of 50 percent of electricity bills until December 2020 with a guarantee of installments in the form of demand deposits for 12 months, as well as the elimination of late fees.

Regarding gas, Apindo encouraged the government to immediately cut the price of certain natural gas for all industrial sectors to the tune of US $ 6 / per mmbtu with a US dollar exchange rate equivalent to Rp14,000.

At present, he continued, seven industrial sectors can get the price of 6 dollars / mmbtu, while most industries still pay a price which is much higher than the price.

"The imposition of a gas bill should also be adjusted to industrial consumption rathewr than a valid contract. We also expect the government to waive the minimum cost for gas because the industry is currently experiencing tremendous difficulties during the COVID-19 pandemic," he said.

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