Freeman Spogli Institute for International Studies Program on Energy and Sustainable Development Stanford University

March 1, 2011 - In the News

Thurber quoted in Jakarta Post

Appeared in The Jakarta Post, February 24, 2011

In order for Indonesia to meet its increasing domestic demand for liquefied natural gas (LNG), the country (one of the largest LNG producers) is gearing up to start importing up to 4.5 million tons of LNG annually.

The domestic shortage of LNG has occured partly because LNG producers can profit more from exporting than selling in the domestic market where price is determined by the government.  Currently about half of the domestically produced LNG is allocated for export.

A way for Indonesia to expand its natural gas supply, Thurber states, is for the government to "...gradually increase the price of gas for industrial users in order to encourage gas exploration activities."

"A strategy that some countries have used is creating dual prices where you subsidize gas sold to one part of the market, but then in another part of the market you might let the prices be market prices."

Topics: Natural gas | Indonesia