- In a bid to accelerate the development of natural-gas networks supplying households and small customers and to encourage commercial natural-gas business entities within this sector, the Downstream Oil-and-Gas Regulatory Agency ("BPH Migas") recently revised a number of provisions that apply specifically to commercial natural-gas business entities through the issuance of Regulation of BPH Migas No. 4 of 2021, which is the Second Amendment to Regulation of BPH Migas No. 22/P/BPH MIGAS/VII/2011 on the Stipulation of Natural-Gas Prices for Households and Small Customers ("Second Amendment").
- Commercial natural-gas business activities undertaken through the use of pipelines should now be carried out by business entities after the relevant parties have first obtained oil-and-gas transportation business permits, special rights for distribution network areas, and oil and natural-gas commercial business permits (previously, only natural-gas commercial business activity permits were required). Moreover, said business entities are now required to comply with the unbundling principle, which in this case should specifically be applied in relation to the unbundling of accounting between business activities involving the transportation of natural gas through pipelines and commercial business activities that involve the transportation of natural gas through pipelines in distribution network areas at the least.
- The Second Amendment now includes micro-scale enterprises within the Small Customers 1 (Pelanggan Kecil 1/PK-1) category.
- The Internal Rate of Return ("IRR") will become the basis for calculations of natural-gas prices for households and small customers, investment in which will be either partially or wholly financed by business entities.
- Under the Second Amendment, the following changes have also now been made: 1) Contributions (iuran) are no longer the parameter that will be used in the order to calculate natural-gas prices based on the IRR; 2) Tariffs have no longer been included as an operational and maintenance costs parameter; 3) The cost of purchasing natural gas involves supplies from oil and/or natural-gas fields and liquefied natural gas and/or compressed natural gas.
- The Second Amendment has been in force since 4 May 2021.
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