Renegotiation of gas contract opposed

Domestic industrial gas consumers opposed plan for a renegotiation in gas contract between state gas distribution company PGN and natural gas producers that would lead to higher gas price for industries, Bisnis Indonesia reported on Friday.

Ahmad Widjaja, Secretary General of the Industrial Gas Consumers Forum, said that it is not appropriate to increase the selling price of gas now amid uncertainty in gas supply to industries as production infrastructure has often suffered shut down, either scheduled or unscheduled.

He said that the upstream oil and gas regulator BPMigas and the government should find ways to ensure gas supply certainty first before asking PGN to renegotiate gas contract with upstream producers that would lead to higher selling price.

Meanwhile, Facts Global Energy in its latest report said that the domestic selling price of gas in Indonesian is generally lower than the gas price in Japan. It said that ideally, higher domestic gas price would help end the polemic between domestic and export price.

BPMigas Chairman R. Priyono said that improvement in the domestic gas price is important before the government moves to renegotiate the Tangguh gas selling price to Fujian. (*)