Senin, Agustus 9, 2021

Provisions on Certain Users and Prices of Natural Gas within Industrial Sector Updated

As a follow-up to the issuance of Regulation of the President No. 121 of 2020 on the Amendment to Regulation of the President No. 40 of 2016 on the Determination of Natural-Gas Prices, the Minister of Energy and Mineral Resources (“Minister”) recently issued Decree of the Minister No. 134.K/HK.02/MEM.M/2021 (“Decree 134/2021”) which updates provisions on the determination of certain users and prices of natural gas within the industrial sector, including volumes of natural gas, as well as adjustments to natural-gas price components and distribution tariffs. Previously, said determinations were addressed under the now-repealed Decree of the Minister No. 89 K/10/MEM/2020 (“Decree 89/2021”).
In regard to distribution, Decree 134/2021 has now clarified the following: 1) Distribution tariffs, which comprise transportation costs and midstream natural-gas costs; 2) Any distribution tariffs which result from the utilization of the facilities of business entities holding transportation business licenses and/or storage business licenses will be subject to taxation laws and regulations; and 3) Any distribution tariffs which result from the utilization of transportation and/or storage facilities and infrastructure in order to support commercial business activities, as owned by commercial business license holders, are not classified as “handovers of services” under the relevant taxation laws and regulations and are to become elements of natural-gas sales pricing.
In addition to decrees which address tariffs for the transportation of natural gas through pipelines and under natural-gas transportation agreements, natural-gas sales and purchase agreements must also be settled by 30 August 2021.
Natural-gas users must ensure that they meet the following obligations: 1) Must use certain volumes of natural gas in accordance with their designation; 2) Must report their performance to the Minister of Industry with a copy also being sent to the Minister to the Director-General of Oil and Gas (“Director-General”); 3) Must fulfill various obligations to the state, including taxation-related obligations; and 4) Must comply with implementation instructions regarding the application of certain natural-gas prices, as issued by the government.
Business entities holding commercial business licenses are required to report the following to the Minister via the Director-General every month or at any time deemed necessary: 1) Realization of natural-gas distribution volumes and prices at certain natural-gas prices; and 2) Realization of volumes and prices for the distribution of any natural gas that is not absorbed.
The various clarifications and obligations outlined above were not previously addressed under Decree 89/2021.
Decree 134/2021 has been in force since 30 July 2021.

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As a follow-up to the issuance of Regulation of the President No. 121 of 2020 on the Amendment to Regulation of the President No. 40 of 2016 on the Determination of Natural-Gas Prices, the Minister of Energy and Mineral Resources (“Minister”) recently issued Decree of the Minister No. 134.K/HK.02/MEM.M/2021 (“Decree 134/2021”) which updates provisions on the determination of certain users and prices of natural gas within the industrial sector, including volumes of natural gas, as well as adjustments to natural-gas price components and distribution tariffs. Previously, said determinations were addressed under the now-repealed Decree of the Minister No. 89 K/10/MEM/2020 (“Decree 89/2021”).
In regard to distribution, Decree 134/2021 has now clarified the following: 1) Distribution tariffs, which comprise transportation costs and midstream natural-gas costs; 2) Any distribution tariffs which result from the utilization of the facilities of business entities holding transportation business licenses and/or storage business licenses will be subject to taxation laws and regulations; and 3) Any distribution tariffs which result from the utilization of transportation and/or storage facilities and infrastructure in order to support commercial business activities, as owned by commercial business license holders, are not classified as “handovers of services” under the relevant taxation laws and regulations and are to become elements of natural-gas sales pricing.
In addition to decrees which address tariffs for the transportation of natural gas through pipelines and under natural-gas transportation agreements, natural-gas sales and purchase agreements must also be settled by 30 August 2021.
Natural-gas users must ensure that they meet the following obligations: 1) Must use certain volumes of natural gas in accordance with their designation; 2) Must report their performance to the Minister of Industry with a copy also being sent to the Minister to the Director-General of Oil and Gas (“Director-General”); 3) Must fulfill various obligations to the state, including taxation-related obligations; and 4) Must comply with implementation instructions regarding the application of certain natural-gas prices, as issued by the government.
Business entities holding commercial business licenses are required to report the following to the Minister via the Director-General every month or at any time deemed necessary: 1) Realization of natural-gas distribution volumes and prices at certain natural-gas prices; and 2) Realization of volumes and prices for the distribution of any natural gas that is not absorbed.
The various clarifications and obligations outlined above were not previously addressed under Decree 89/2021.
Decree 134/2021 has been in force since 30 July 2021.

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