Industrial associations reject govt?s gas pricing mechanism

Five industrial associations have rejected the government's decision to allow state owned gas distributor PT Perusahaan Gas Negara (PGN) to sell the fuel based on "business-to-business" deal, citing the policy will hurt the industry, Investor daily reported on Thursday.

The industrial associations called on the government to stick to its initial plan of imposing a gas pricing formula that bars PGN from setting too high a price for the fuel.

"The (business-to-business) mechanism is not healthy at all. It will kill the industries," Ahmad Safiun, the head of the Association of Indonesian Rubber Glove Producers (ASTA), said.

Aside from ASTA, the four other associations that join he protests are the Association of Indonesian Pulp and Paper Producers (APKI), The Association of Indonesian Glass Sheet and Security Glass producer Association (APKLP), the Assocation of Indonesian Various Ceramics Producers (ASAKI) and the association of Indonesian Plastic and Olefin Producers (Inaplas).

Director General of Oil and Gas Evita Legowo earlier said the government had decided to drop the proposal to impose price formula for non-subsidized gas and, instead, will allow PGN to set the price based on "business-to-business" deal with consumers. (*)