Government is likely to increase gas prices for fertilizer producers

The government is likely to increase prices of gas sold to fertilizer producers because the current price levels have been already too low, Bisnis Indonesia reported on Friday.

Speaking in at a hearing with members of the Commission V of the House of Representatives (DPR) on Thursday, Coordinating Minister of Economy Dorodjatun Kuntjoro-jakti said that the prices of gas sold to fertilizer producers were now among the lowest if compared to prices of gas sold to other consumers.

?With the current price level, producers prefer to sell their gas to other consumes or for exports,? he said at the hearing which was also attended by Minister of Industry and Trade Rini MS. Soewandi, Minister of Finance Budiono and the chairman of Investment Coordinating Board (BKPM) Theo Toemion.

Dorodjatun, however, did not say how much the gas prices would be increased.

At present fertilizer producers buy their gas at a price of between US$1 and $1.8 per MMBTU. The government imposes a lower price level to fertilizer producers because large part of their fertilizer products are sold to farmers at a subsidized price.

This policy has discouraged gas producers from selling their gas to fertilizer producers. As a result, many fertilizer producers suffer a cute shortage of gas supply.

Director of Chemical, Agricultural and Forestry Industries at the Ministry of Industry and Trade Zaenal Arifin said that his office and the Ministry of Energy and Mineral Resources were still discussing the fair price level of gas sold to fertilizer producers.

?We are trying to find the best solution so that the price of gas sold to fertilizer producers will not become a burden to producers,? he said. (*)