Government revises PGN?s price hike policy

Following pressure from industries, the government finally decided to revise the recent move by state-owned gas distribution company PGN to raise its gas selling price by 55 percent, reports said on Wednesday

Minister of Energy and Mineral Resources Jero Wacik said that the government and PGN are currently making the necessary calculation to decide on what would be the fair price of gas for industries, and whether the price hike should be made in gradual as has been suggested by some industrial players particularly considering the possibility of making the price hike after the Moslem Idul Fitr festivity.

Speaking to reporters following a meeting with Minister of Industry MS Hidayat, PGN officials and other related ministry of energy officials, Jero said that a final decision would be made within a week time.

PGN raised the price of gas for industrial customers in the western part of Java by 55 percent in the middle of May, prompting protest from the industries, who have claimed that the price hike was too steep and sudden, thus undermining the competitiveness of the country?s industrial sector.

PGN moved to increase its gas selling price to offset the hike in the price of gas charged by the upstream gas producers.

PGN President Director Hendri Prio Santoso declined to comment on the new government policy.

Kontan daily said, however, that the government?s move to revise the gas price policy only affects the gas sold by PGN, while the price hike in the upstream sector would not be affected.

Editing by Reiner Simanjuntak