AAF fertilizer plant may stop operation again

Fertilizer producer PT Asean Aceh Fertilzier (AAF) which resumed its activities early this month after being halted since August this year, might again close down its operation due to uncertainty related to the supply of gas from PT ExxonMobil, Serambi Indonesia reported on Monday.

AAF’s corporate secretary Amrul As told the newspaper that under the agreement with Exxon, the company would only receive a gas supply until December 22 if the government could not meet the gas company’s demand to buy the gas at market price.

“AAF will be forced to stop its operation again if there is no certainty about the gas supply after the December 22 deadline,” he said.

Exxon agreed to resume the gas supply after the government promised to give a subsidy on the purchase of gas by AAF. But no contract has been made because the government’s subsidy is still not clear.

Exxon stopped its gas supply in August this year after its sales contract with AAF ended. The company will resume the gas supply only if the price of gas is based on market price. AAF has said that it has no money to buy the gas at the market price and could make the purchase only if there is a subsidy from the government.

The government has promised to meet the subsidy demand but the government’s agency responsible for the case has not yet issued any regulation related to the subsidy provision. (*)