Indonesia to Accelerate Shift to Natural Gas Vehicles

13 July 2008

Antara News. Indonesia's Vice President Jusuf Kalla stated that the government will speed up implementation of its program to shift to natural gas for transportation fuel.

Speaking at the commissioning of Indonesia’s first Compressed Natural Gas (CNG) filling station at Cikarang, east of Jakarta, on Saturday, he said the government would take concrete steps, including issuance of regulations, to accelerate the oil-to-gas conversion process for automotive transport.

Provincial governors would be asked to obligate all public transports in their respective regions such as city buses, taxis and motorized pedicabs to use gas instead of petrol...The government would also encourage the switch by providing incentives to the transport companies concerned and carry out the program with a clearly defined timeframe.

Indonesia has the world’s fourth largest population (behind China, India, and the US). Although it joined OPEC in 1962, declining production and increasing domestic consumption resulted in the country becoming a net importer of oil in 2004.

However, according to the US Energy Information Administration (EIA), Indonesia is the tenth largest holder of proven natural gas reserves in the world and the single largest in the Asia-Pacific region.

Historically, the EIA says, Indonesian natural gas production has been geared toward export markets, but the country has made an effort to shift natural gas toward domestic uses in recent years as a substitute for the country’s declining oil output. However, Indonesia’s limited natural gas transmission and distribution network remains an obstacle to further domestic consumption.