Govt to set gas price for fertilizer makers at $1.5 per MMBTU

The government has planned to set natural gas prices for fertilizer makers at US$1.5 per million British thermal unit (MMBTU), Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Tuesday.

Fertilizer producers reportedly buy natural gas at $1.8 ? 2 per MMBTU. They use it as raw material for producing fertilizer.

Purnomo did not say however when the new price would become effective.

He said that the gas price reduction would cause government revenue to drop by $30 million per year.

Meanwhile, the chairman of Fertilizer Producers Association, Zainal Soedjais, said Tuesday that the gas price should actually be cut to below $1 per MMBTU so that fertilizer prices for farmers could be cut to less than Rp1,500 (US$=Rp8,400) per kilo.

In Malaysia, fertilizer producers bought natural gas at 90 US cents, Zainal told reporters on the sidelines of a symposium on natural gas for industry in Jakarta. (godang)