GAS FOR INDUSTRY

Industrial Gas Prices Still Rise 1 April 2010
According to the Head of the Executing Agency for Upstream Oil and Gas (BP Migas), R Priyono appropriate ceremony and 14 head of the division-level officials of BP Migas, the price increase that adjusts with economical price.

Rising gas prices from the manufacturer. Related to industry demand not raise gas prices, according Priyono, it is difficult to achieve.

If the price does not rise industrial gas, oil and gas upstream industry will die, nobody wants to invest because they do not profit. So, the price should be appropriate to invest in upstream economical to run, he said.

So far the allocation of gas for domestic needs from PT Perusahaan Gas Negara (PGN) is obvious. However, PGN difficulty conducting gas to end users due to limited gas infrastructure.

For industrial customers in West Java, the allocation of gas supply 329 million metric standard cubic feet per day (mmscfd).

Separately, Secretary of the company PT PGN Wahid Sutopo states, the current gas price of 3.8 dollars per million british thermal unit (MMBTU) plus transportation costs.

The plan, as at 1 April 2010, the gas price for industry increased by 10-15 percent. PGN's gas prices followed the price of the proposed upstream industries and depending on where customers are located.

In a number of gas sale and purchase contract between PT PGN and a number of producers, gas prices have increased, including from Medco and PT Pertamina HE ONWJ.

To meet industry needs, PGN need new additional supply from a number of gas producers such as Medco. Additional gas supplies have risen compared to earlier by reason of the increase in investment costs and to follow developments in world oil prices.

Especially since 2007 prices of industrial gases from PT PGN has not increased. Yet another type of fuel, like diesel, for industry was up first.

The other thing in question is the business of gas supply deposit payment. According to Wahid, all industrial customers requested a three-month guarantee of payment in form of credit notes (letters of credit / LC).

Thus, the industrial customers do not have to pay in cash, enough with the L / C, gas used first, then pay cash, he said.

Industry players is also an objection against the imposition of surcharge plans about 200 percent by PGN for the gas industry that uses more than an agreement.

PGN argued, it was to control the use by customers. If the use according to the contract, not subject to surcharge. Additional charges apply if usage above the limit of the contract.

Therefore, its value should be high enough to be considered before exceeding contract customers.

Contacted separately, the Indonesian Employers Association chairman Sofyan Wanandi asserted, employers objected to the increase in gas prices. Employers ask for a compromise that is fair for both parties so that the industry had no trouble operating.

What we wonder, Why is the government still allow the export of gas. Gas exports to Singapore are still high. The reason is a contract, can not be undone. What is clear is that we can never expressly decided the fulfillment of domestic gas supply before export.