FOUNDER & Advisor of the ReforMiner Institute (Research Institute for Mining and Energy Economics) Pri Agung Rakhmanto said that the utilization of the Certain Natural Gas Price (HGBT) policy, which is currently not optimal, still needs to be evaluated thoroughly.
“It is indeed necessary to thoroughly evaluate the costs and benefits of what has been going on so far. State revenues have clearly decreased, while in terms of additional taxes and other expected economic multiplier effects it seems unclear,” said Pri Agung when contacted on Sunday (10 /3).
In terms of increasing industrial competitiveness, he continued, it must also be seen more comprehensively because gas prices are not the only determinant of industrial competitiveness.
Furthermore, he said that the factors that influence industrial competitiveness are not single, but diverse and not the same for each type of industry. According to him, the four factors that influence industrial competitiveness are demand factors, resource factors, industrial strategy and linkages with supporting industries in the industrial chain.
“The price of gas is only one part of the resource factor, and more specifically in the cost aspect. The portion of gas costs in the cost structure for each industry also varies. The oleochemical industry is more or less in the range of under 5%, the glove industry can be 7-15% “The glass industry could be 15-20%, and for industries whose main raw material is gas, such as fertilizer for example, it could be greater,” he said.
“But once again, that is only one part, namely the cost portion, of one of the factors that influence the competitiveness of an industry, namely the resource factor,” he continued.
He said that if the government intended to provide encouragement to the industrial sector, then the alternative policy as a replacement for the HGBT policy would actually be to directly provide tax incentives (direct fiscal incentives) to the targeted industries.
“It is more direct and the cost-benefit measurements are clearer. This policy does not cause economic distortions in the management of the energy sector, the investment climate in the energy sector, both upstream, midstream and downstream, is not disturbed because prices are based on the principle of economic feasibility, not regulated and uniformed,” he concluded. (Z-3)
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