Government asked to rescue AAF fertilizer plant

The legislative council of Aceh province has urged the central government to issue a concrete action to save fertilizer plant PT Asean Aceh Fertilizer (AAF) from possible closure.

The chairman of the Commission C of the council, Jamaluddin Ahmad, said in Banda Aceh on Monday that the closure of the fertilizer plant would not only bring a negative impact on the province’s economy but also would cause a massive unemployment problem.

In earlier reports, AAF’s corporate secretary Amrul As said the fertilizer plant which resumed its operation late last month might close again due to uncertainty over gas supply from ExxonMobil.

Under the existing 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.

“The government should help AAF to enable it to sign a new contract based on price demanded by Exxon,” Jamaluddin 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. (*)