Government cuts price of gas sold to fertilizer producers

The government has finally decided to cut prices of gas sold to fertilizer producers in efforts to curb the increase in the price of fertilizer in the market, Kompas reported on Thursday.

Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Rachmat Soedibyo said the price cut for the time being effected only fertilizer producers PT Pupuk Sriwijaya and PT Petrokimia Gresik.

He, however, was reluctant to unveil the new price. As reported earlier, Indonesian fertilizer producers have demanded the government to cut gas prices to US$1 per million British thermal unit (MMBTU) from $1.3.

Pertamina?s president director Baihaki Hakim said that there was no problem for the oil and gas company to reduce the price of gas to fertilizer producers as long as the government subsidize the margin between the old and new prices.

According to him, reducing the gas price to $1 per MMBTU as demanded by gas producers would be too low for producers. "But it is up to the government to decide," he added.(*)