Govt asked to allow Pertamina in Palembang to sell electricity to PLN

Ramson Siagian, a member of the Commission VII of the House of Representatives (DPR) to allow state owned oil company Pertamina's production unit in Palembang to sell a part of its power to state electricity company PLN in a bid to cope with the acute shortage of the power supply in southern Sumatera.

The power crisis in South Sumatera, Lampung and Bengkulu could no longer be tolerated and Minister of Energy and Mineral Resource should offer his hand to solve the problem, the legislator was quoted as saying by Bisnis Indonesia.

According to Ramson, Pertamina is technically able to help solve the acute shortage of the power supply in the region but it could not do it due to the legal barrier imposed by the government. The fact that the state oil company has to buy gas from government at prices higher than it sells to PLN and fertilizer producers has also become the standing block for Pertamina to sell its power to the state electricity company.

Ramson said that Pertamina should buy gas from the government through the state gas company Perusahaan Gas Negara at US$2.94 per mmbtu or equivalent to $0,044 per kWh, much higher than $1.5 per mmbtu or $0.037 per kWh to fertilizer producer PT Pusri.

Based on an initial negotiation, PLN is willing to buy electricity from Pertamina at US$0.087 per kWh, which is very low compared to Pertamina's power generating costs.

Ramson said that the government should therefore cut the selling price of gas to Pertamina, if not it could suffer losses of about US$80 million within six months. (*)