Subsidy plan for fertilizer firms awaits President?s approval

Plans to provide subsidy for fertilizer firms in purchasing their gas needs has yet to be approved by President Megawati Soekarnoputri, Bisnis Indonesia daily reported on Tuesday.

Director General for Chemical, Agriculture Industry and Forestry Products at the Ministry of Industry and Trade, Zaenal Arifin, said that under the subsidy plan, all fertilizer producers could buy gas at a lower price UU$1 per million British thermal unit (MMBTU) as compared to $1.3-$1.8 per MMBTU currently being paid by the fertilizer firms. The subsidy policy was supposed to start this month.

?The new gas price will be affective this month, but we're still waiting for the President's approval," Zaenal said, adding that the gas subsidy would be given to producers of all fertilizers including SP36, ZA and NPK fertilizer products. At present, the subsidy is given only for the production of urea fertilizer.

With the subsidy policy, the fertilizer firms should be able to sell their products to farmers at lower prices -- set by the government ?- Rp 950 per kg for ZA, Rp 1,400 per kg for SP36, Rp 1,600 for NPK and Rp 1,150 per kg for urea. (*)