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Following the government’s intervention, state-owned gas company PT Perusahaan Gas Negara has backed down from a plan to reduce the amount of natural gas it allocates to domestic industry and to charge them drastically higher prices if they wanted to buy more than their allotted amount.

Benny Wahyudi, director general of agriculture and chemical industries at the Industry Ministry, said on Saturday that PGN would not proceed with a plan to cut the allocation to domestic industry by 20 percent and to charge industrial buyers three times more than the regular price if they wanted more gas than they were allocated, he said.

“The latest update is that PGN has secured additional supply from Pertamina, so there won’t be any cuts to the supply for local industry,” Benny said.

Domestic industrial buyers are due to sign two-year gas-supply contracts with PGN today. Late on Thursday, the gas distributor announced it was cutting the allocations and pushing up prices, provoking a widespread outcry from industrial buyers.

The reason for PGN’s announcement is that the gas distributor is itself facing a gas shortfall. Two of its suppliers — PT Pertamina Hulu Energi and ConocoPhillips — are having difficulties securing enough gas to meet their supply contracts with PGN.

PGN said last week that ConocoPhillips might only be able to deliver 250 million cubic feet of gas a day this year from its South Sumatra field, well below the 390 million cubic feet a day it was contracted to provide.

In reaction to PGN’s announcement, the government hastily convened a meeting of customers and PGN officials on Friday. A few hours later the issue was discussed further at a meeting presided over by Coordinating Minister for the Economy Hatta Rajasa.

The government arranged for PGN to secure additional gas from Pertamina Hulu Energi, a unit of state oil and gas company PT Pertamina, by extending a contract for 65 million standard cubic feet of gas per day.

Pertamina Hulu Energi spokesman Ali Mundakir told Tempo magazine on Friday that the contract, originally set to expire this month, was extended until June.

Wahid Sutopo, PGN’s corporate secretary, told the Jakarta Globe that PGN “will continue to make sure that all of its supply contracts to local industry are fulfilled as they are a vital part of our nation’s economy.”

Several industry associations contacted by the Jakarta Globe on Sunday said they had yet to be notified by PGN of the cancellation of its previous plan to cut supply.

“I have not been notified that PGN has received additional gas supply from Pertamina,” said Urip Timuryono, chairman of the Indonesian Cement Association (ASI).

He said he welcomed PGN’s decision to scrap its plan.

Thomas Dharmawan, a senior adviser to the Indonesian Food and Beverage Producers Association (Gapmmi), said the association also had not been notified.

“Gapmmi will conduct a meeting on Monday before the signing of the contract extension, but we have yet to be notified that the [20 percent] decrease in gas allocation would be canceled because of the additional gas supply from Pertamina,” Thomas said.