Govt to Apply New Industrial Gas Price on Sept.1

By webadmin on 11:06 am Jun 22, 2012
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Damiana N Simanjuntak & Retno Ayuningtyas

The government plans to implement new and likely increase pricing for industrial gas in response to protests against state gas company Perusahaan Gas Negara unilateral price hikes in May.

“The government will take a final decision on the increase of prices around June 27; [the changes] will come into effect as of Sept. 1” Industry Minister MS Hidayat said.

Hidayat, who spoke on Wednesday after meeting with Energy and Minerals Minister Jero Wacikand and a number of entrepreneurs and gas consumers, said the amount of the increase, and whether it would be gradual or all at once, would be announced at the same time.

The meeting followed mounting protests from industry and other gas consumers against the gas price increase applied by PGN on May 15. Wacik said after the meeting that the government was still studying the total gas demand from the domestic industry sector, as well as the government’s available gas supply.   

Franky Sibarani, the deputy general secretary of the Indonesian Association of Employers (APINDO) wrote an open letter to President Susilo Bambang Yudhoyono saying that industries wanted the rise in gas prices to be implemented gradually every six months.

Franky proposed a 15 percent rise now, 11 percent in Jan. 2013, another 11 percent in July and 14 percent in Jan. 2014.

PGN president Hendi Prio Santoso said that his company is planning to import gas from a number of African countries to meet mounting domestic demand. He said that gas fields like Tangguh and Natura would only be able to distribute their gas as of 2014 because of infrastructure constraints.  

Deputy Energy and Mineral Resources Minister Rudi Rubiandini said the government was also studying PGN’s role as both transporter and trader in the gas sector.

Critics have said that the PGN’s dual roles has made the gas industry inefficient, and have asked that the government limit the company’s role to transporter only.

Komaidi Notonegoro, an energy expert from the Reforminer Institute, said that PGN’s dual role went against a 2009 ministerial decree  that prohibits enterprises from distributing their own gas through the pipeline network.

PGN corporate secretary Heri Yusup said that the company will abide by the decision of the government. But he also hoped for “fairness” in the pricing of raw materials, asking for a correspondingly gradual price increase.

“We raised the price of gas for the industry not just randomly, but because prices at the upstream sector were rising. Logically, we also raises prices downstream. We cannot bear the increase of prices at the upstream sector if they reach more than 200 percent,” Yusup said.

Meaniwhile, Tadjuddin Noer Said, the chairman of the antitrust supervisory committee (KPPU) said that the price of gas should be determined by the government and not a state enterprise such as PGN.

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