Impact of natural gas pricing policy for energy security and macroeconomic resilience: A literature review from global perspective

Indonesia’s government has targeted 24% of natural gas in the national energy mix by 2050. However, one of the main problems in Indonesia’s natural gas development is the price mechanism. Unlike many countries, Indonesia’s natural gas market, including its pricing, is still heavily regulated and subsidized by the government. The low natural gas price has damaged the investment climate and slowed the natural gas development in the country. An overview of the global natural gas market evolution, as well as a comprehensive analysis of natural gas market transformation from China and Malaysia, were presented in this paper. The wider gap between supply and demand of natural gas and the increase of the LNG market in Asia have pushed China and Malaysia to reform their natural gas market into a liberalized system. This provides an insight to examine Indonesia’s natural gas pricing policies. The highly regulated market often fails to provide the actual cost of supply, leads to underinvestment, and causes a natural gas shortage in a country. Natural gas pricing policy transformation is mandatory to ensure supply stability and keep up with the global natural gas market dynamic. The transformation should be implemented gradually to give natural gas producers and end-users enough time to adjust to the regulations. In the end, gas-to-gas competition should be set as the long-term goal to allow retail competition in Indonesia’s natural gas market.

The Dependence and Risk Spillover Between Energy Market and BRICS Stock Markets: A Copula-MGARCH Model Approach

The article examines the dynamic dependence structure and risk spillover between the future market of energy commodities and Brazil, Russia, India, China and South Africa (BRICS) stock markets for different market conditions. The study used copula-based multivariate GARCH model, or in short C-MGARCH model, to explore the conditional correlation by multivariate generalized autoregressive conditional heteroskedastic (MGARCH) and the remaining dependence by different copula models. Our results provide significant positive dynamic dependency among crude oil markets (natural gas market) and BRICS stock markets. We then explore the financial implications of volatility spillovers regarding portfolio risk management through an analysis of risk spillovers from energy market to BRICS countries using the value at Risk (VaR), conditional value at risk (CVaR) and delta CVaR. Our findings support the existence of significant risk spillover between crude oil markets (natural gas market) and BRICS stock markets. The presence of volatility spillover among oil prices, natural gas prices and BRICS stock market implies that oil market information (natural gas market information) enhances the volatility forecast in stock markets. Consequently, investors must take oil markets and natural gas markets into account at the time of financial portfolios structuring and in improving their hedging strategies.

Liquefied natural gas as a priority direction for the development of the Russian fuel and energy complex

С каждым годом рынок сжиженного природного газа стремительно развивается и выходит на новые рынки. Российский СПГ не только реализуется на внешнем рынке, но и преобладает на внутреннем. В стране работают одни из крупнейших в мире заводов по производству СПГ. Россия стремится развивать это направление, планируя занять одно из лидирующих позиций среди стран-производителей сжиженного природного газа. Every year, the liquefied natural gas market is rapidly developing and entering new markets. Russian LNG is not only sold on the foreign market, but also prevails on the domestic market. The country has one of the world's largest LNG production plants. Russia is striving to develop this direction, planning to take one of the leading positions among the countries producing liquefied natural gas.