Govt to provide gas subsidy for fertilizer producers: Purnomo
Monday, December 5 2005 - 02:10 AM WIB
Speaking at the ground breaking ceremony for the construction of the gas station in Pagar Dewa, Muara Enim, South Sumatra on Sunday, the minister said that for 2006, the subsidy to be allocated for fertilizer producers would reach about Rp 3 trillion.
"The subsidy is important to ensure that the fertilizer producers will be able to buy gas at a range between US$1.5 and US$2 per MMBTU," he said.
According to the minister, the subsidy is needed to ensure that the country's fertilizer producers will not close their plants. Reponding to media reports that state owned fertilizer companies PT Pupuk Iskandar Muda in Aceh and PT Pupuk Kujang in Cikampek, West Java would close the operation of their first units of their plants due to the lack of gas supply, the minister said that the problem occurred because the two fertilizer producers did not prepare for the extension of their gas supply along before the termination of their contracts.
"The two fertilizer producers should negotiate the gas supply with Pertamina or PGN if they want to continue to operate the plants. If they have a problem with the prices, they can ask for a subsidy from the government," the minister said.
Purnomo also dismissed a growing concern that state owned fertilizer producer PT Pusri in Palembang, South Sumatra will suffer a shortage of gas supply given the fact that large part of the gas production from the province and nearby Jambi province will be transmitted to Java.
According to the minister, the gas reserves of up to 6 trillion cubic feet now being developed by Conoco Philips in Jambi will be more than enough to supply PT Pusri.
Meanwhile a senior official of the upstream oil and gas regulatory agency BP Migas, Sucahyo W. Pratomo said that the contract for the gas supply to PT Pusri had been extended until 2012. But he said that the government could not provide the subsidy due to the sharp increase in the gas prices. (godang)