Govt yet to decide on EMOI?s proposal over gas price for fertilizer makers

The Ministry of Finance has yet to decide on whether the price of natural gas supplied to Aceh-based fertilizer makers can be maintained at the level proposed by gas producer ExxonMobil Oil Indonesia (EMOI), a well-placed government official said Monday.

Kardaya Warnika, vice chairman of BPMIGAS which holds the highest authority over the country?s upstream oil and gas sector, said EMOI had requested the Ministry of Finance to set gas prices for local fertilizer producers at export price levels.

EMOI, the Indonesian unit of U.S. energy giant ExxonMobil Corporation, operates gas fields in Aceh and supplies gas to local fertilizer makers PT Pupuk Iskandar Muda and PT ASEAN Aceh Fertilizer.

Reports said ASEAN Aceh Fertilizer?s gas purchase and supply contract with EMOI will expire at the end of 2002, while Pupuk Iskandar Muda?s contract will expire by the end of 2003.

At present, gas for the country?s fertilizer makers is presently sold at US$1.3-1.85 per million metric British thermal unit (MMBTU), and the fertilizer produced is for local farmers. Meanwhile, gas for exports is priced at $1.85 per MMBTU.

Meanwhile, reports said that the government will adopt a new formula on gas price for fertilizer producers and that the formula will be effective next January.

According to the new formula, fertilizer makers will no longer buy gas at subsidized prices but they will receive compensation from the sales of their products to farmers. (godang)