PGN urged to cancel gas price increase

Minister of Industry Andung Nitimiharja has strongly deplored state owned gas distribution company PGN?s decision to raise the price of its gas and called on the company to immediately cancel the price increase decision, Koran Tempo reported on Tuesday.

He said that PGN?s gas prices had seriously affected industries specially the country?s ceramic producers, which mostly relied on gas fuel to carry out their day to day activities Andung also promised he would coordinate the plan to cancel PGN?s gas price increase with related ministers such as State Minister for Enterprises, Minister of Energy and Mineral Resources.

?I have met with Minister of Energy Purnomo Yusgiantoro. He also agreed on the need to cancel PGN?s price increase decision,? he said.

Beginning last week, PGN raised the gas prices of gas sold to industries by 13.7 percent to US$3.3 per million britsh thermal unit (mmbtu). At the same time, the company also raised the toll fee (rental fee for pipelines) by 52.5 percent to Rp 450 per cubic meter so that that the overall cost that has to be paid by users is US$45 per mmbtu.

PGN plans also to increase the price and toll fee by another 17 percent and 103 percent, respectively, beginning in January, next year.

Meanwhile, a senior official at BP Migas, the regulatory body for oil and gas exploration, also criticized PGN?s decision to raise its gas prices. ?There is no reason for PGN to increase the price because the gas suppliers still maintain their price level,? the official, who asked for anonymity, said. (*)