House to question gas producers on shortage of gas supply

House of Representatives (DPR) will summon the country?s natural gas producers and state owned oil and gas company Pertamina in the forthcoming sessions to question them on the continued decline in the supply of natural gas to major fertilizer producers, Republika daily reported on Thursday.

Cecep Rukmana, a member of the House?s Commission VIII, said in Jakarta on Tuesday that the shortage of the gas supply had severely affected the supply of fertilizer to the country?s 21 million famous. "It is an important issue which could affect national resilience," he added.

According to him, major fertilizer producers such as PT Pupuk Kaltim in Bontang, East Kalimantan and PT Pupuk Iskandar Muda and PT ASEAN Aceh Fertilizer, both in Aceh have seriously suffered a shortage of natural gas supply due to the decline in the supply from natural gas producers.

He acknowledged that many gas producers had reduced the supply due to the decline in their gas reserves. "But we have to know if they have really run out of their gas reserves. What we fear is that those gas producers prefer to export their gas rather than supply the local fertilizer producers.

As part of the government?s policy, the gas producers buy their gas at subsidized prices or at a level which is far below the prices the producers received from their gas exports.

Aceh-based gas producer ExxonMobil said recently that they would only supply the two local fertilizer producers PT Iskandar Muda and PT ASEAN Fertilizer only if the government agrees to compensate the difference in the subsidized prices and the export prices. (*)