The government has recognized that establishing and maintaining the necessary infrastructure of pipes for the purposes of increasing the use of natural gas is both a capital intensive and high risk proposition. Therefore, the government is committing itself to ensuring that the investment climate is conducive to intensive capital investment and the taking of risk by guaranteeing returns on investments that companies make in the gas piping business. To this end, the Minister of Energy and Mineral Resources has issued Regulation No. 19 of 2009 to set out the relevant provisions.
The regulation requires that business activities in this sector be carried out in a manner that is integrated, transparent, accountable, competitive, and fair. The objectives are, among others:
a.
Increase the exploitation of natural gas for domestic needs;
b.
Raise the level of investment in infrastructure;
c.
Guarantee levels of efficiency and effectiveness in gas supply;
d.
Provide legal certainty; and
e.
Guarantee the satisfaction of consumer rights to natural gas.
The Director General is to prepare a Master Plan on the National Natural Gas Transmission and Distribution Network. The Master Plan will take into account current infrastructure and the potential for natural gas use.
Commercial natural gas activities undertaken by companies require a license to be issued and those licenses apply in specific commercial zones. These zones are to be noted as geographical coordinates and must be in accord with the distribution network. A license can extend beyond one specific commercial zone provided that the license reflects the multiple commercial zones covered.
There are three basic pricing structures for natural gas, namely: household and small-scale users, specific users, and general users. These prices will in turn be set by the Regulatory Authority, the Minister, and the companies, respectively. For companies, they are required to take into account the ability of consumers to pay and operate with an acceptable margin.
The regulation seemingly suggests that the government will not tolerate prices that are deemed too high. It is also expected that the Commission for the Supervision of Business Competition (Komisi Pengawas Persaingan Usaha / KPPU) will be keeping a watchful eye for any indication that there are breaches of the Anti-Monopoly Law.
The regulation has been in force since 31 August 2009.
The government has recognized that establishing and maintaining the necessary infrastructure of pipes for the purposes of increasing the use of natural gas is both a capital intensive and high risk proposition. Therefore, the government is committing itself to ensuring that the investment climate is conducive to intensive capital investment and the taking of risk by guaranteeing returns on investments that companies make in the gas piping business. To this end, the Minister of Energy and Mineral Resources has issued Regulation No. 19 of 2009 to set out the relevant provisions.
The regulation requires that business activities in this sector be carried out in a manner that is integrated, transparent, accountable, competitive, and fair. The objectives are, among others:
a.
Increase the exploitation of natural gas for domestic needs;
b.
Raise the level of investment in infrastructure;
c.
Guarantee levels of efficiency and effectiveness in gas supply;
d.
Provide legal certainty; and
e.
Guarantee the satisfaction of consumer rights to natural gas.
The Director General is to prepare a Master Plan on the National Natural Gas Transmission and Distribution Network. The Master Plan will take into account current infrastructure and the potential for natural gas use.
Commercial natural gas activities undertaken by companies require a license to be issued and those licenses apply in specific commercial zones. These zones are to be noted as geographical coordinates and must be in accord with the distribution network. A license can extend beyond one specific commercial zone provided that the license reflects the multiple commercial zones covered.
There are three basic pricing structures for natural gas, namely: household and small-scale users, specific users, and general users. These prices will in turn be set by the Regulatory Authority, the Minister, and the companies, respectively. For companies, they are required to take into account the ability of consumers to pay and operate with an acceptable margin.
The regulation seemingly suggests that the government will not tolerate prices that are deemed too high. It is also expected that the Commission for the Supervision of Business Competition (Komisi Pengawas Persaingan Usaha / KPPU) will be keeping a watchful eye for any indication that there are breaches of the Anti-Monopoly Law.
The regulation has been in force since 31 August 2009.
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