Indonesia to require production of gas-powered vehicles

The Indonesian government would obligate car producers marketing their products in the country to partly manufacture vehicles that can be fueled by gas or oil this year as an effort to sag the country's reliance on oil, senior official said here on Thursday. As a legal basis for the plan, the government of Indonesia, a fast growing car market and a country with abundant gas reserves, plans to issue a regulation this year, said Wiratmadja Puja, head of the government task force for the program to shift reliance from fossil fuel to gas. The largest economy in Southeast Asia has declared the program for years as the country's aging oil wells have pumped less due to a lack of fresh investment. "There must be a breakthrough otherwise the program could not run," he said. "The regulation is going to be issued soon this year. The planned-ruling would require manufacturers to ensure that parts of their products can be fueled either by oil or gas," said Puja. Indonesia recorded an average of about 1 million car sales annually supported by accelerating economic growth and the growing middle class of about 238 million people. The government has scrambled to bolster the oil-to-gas conversion by placing priority on allocating rising domestic gas output to comply with the increasing demand of energy in the country, Energy and Mining Minister Jero Wacik said. State-owned gas distribution firm PT Perusahaan Gas Negara, or PGN, and state oil and gas firm PT Pertamina have set up 23 gas refueling facilities nationwide. Going forward, Indonesia is expected to gradually add the number of the gas refueling stations by up to 100 units in a few years to come and 1,000 units in the longer term, according to the minister. Rising energy demand has hiked the consumption of subsidized fuel in Indonesia, which resulted in increase in oil import. Indonesia has a proven natural gas reserve of 104 trillion cubic feet and oil reserves of 3.7 billion barrels, according to data from the country's upstream regulator SKK Migas.