Pertamina seeks higher gas price

State-owned oil and gas company PT Pertamina wants its customers, including state owned electricity firm PT Perusahaan Listrik Negara (PLN) to pay higher for its gas, citing that the current selling price of US$3.5 per million british termal unit (MMBTU) paid by its customers was too low.

 

Company president Ari H Soemarno said that an increase in its gas' selling price could become an incentive for the company to drive up exploration so as to overcome the shortage of gas supply.

 

“We want the gas price to be equivalent to the market price,” said Ari in Jakarta on Tuesday, adding selling price should take into account the high costs paid by the firm for exploration.

 

He however did not specify the price level demanded by the company. But, state owned gas distribution company PT PGN sells its gas at more than $5 per MMBTU.

 

While acknowledging that gas selling price is decided based on business-to-business negotiation, Ari said the government needed to get involved in the negotiation because PLN is a state owned company.  

 

Ari said gas buyers should not raise objection to the increase, because, even if Perrtamina raised its gas selling price, the price would still be much lower compared to other fuel. For instance, he said, PLN spent $15 – $16 per MMBTU for industrial diesel oil and $9 – $10 per MMBTU for fuel oil.

 

“Meanwhile, PLN has so far asked for $3 – $3.5 per MMBTU. The request is unreasonable,” he went on. (*)