PGN proposes new margin in gas sale
Monday, April 7 2008 - 01:36 AM WIB
The proposal will be made amid the government's plan to regulate the sales of gas to industrial users.
Director General of Gas at the Ministry of Energy and Mineral Resources Luluk Sumiarso said on Saturday that PGN's proposal for the five percent margin and the plan to peg the gas prices to the LNG prices were unveiled by PGN?s president Sutikno during a meeting with industrial gas users.
He said that the industrial users had in principal agreed with the PGN proposals.
He said the government was seeking inputs from industrial users for its plan to regulate the country's sale of gas.
The chairman of the association of ceramics tiles producers Achmad Wijaya, however, said that the association opposed the government's plan to impose a new formula in setting up the prices of gas to industrial users this year.
?The price of gas for industries was increased in August last year. If (PGN) intends to apply the new pricing formula, we ask it to do it next year,? he said.
"What the government unveiled during the meeting was only a trick to increase the gas prices," he added.
Separately, upstream oil and gas regulatory body BPMIGAS said that the volume of gas sales in the domestic market had reached 13.33 trillion cubic feet (TCF) or about 71 percent of the total volume of gas contracts during the 2003-2007 period, while the contracts of gas exports reached 5.42 TCF during the period, or about 29 percent of the total volume gas contracts.
In 2007, the gas sales contracts for domestic buyers reached a total of 2.78 TCF, of which about 0.99 TCF ( about 37 percent) were sold to households, 0.92 TCF (about 35 percent) to power plants, and about 0.87 TCF (around 28 percent) to fertilizer and petrochemical producers. (*)