Gas prices for fertilizer producers will be lowered

Director General of Oil and Gas Rachmat Sudibyo confirmed on Thursday that an inter-governmental team has proposed for the cut in the price of gas sold to fertilizer producers to US$1.6 per million British thermal unit (MMBTU) from $2 per MMBTU at present.

Rachmat told Petromindo.Com that the Minister of Finance would make the final decision on the proposed cut. According to him, the proposed cut would be the maximum level the government could do because if the gas price is cut lower than $1.5 per MMBTU, it would affect the state revenue.

The Ministry of Agriculture has called on the government to cut the price of gas sold to fertilizer producers to $1.3 per MMBTU in order to enable them to keep the fertilizer price at Rp 1,000 per kilogram.

Director General for Farming Ato Suprapto suggested the use of a special label for the fertilizer allocated for the domestic market to ensure that the subsidized fertilizer would not be sold overseas. (alex)