Government increases gas price by 20 percent

Government increases gas price by 20 percent

JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana has
issued a decree to raise the price of gas by 20 percent to Rp 385
(10 U.S. cents) and Rp 400 per cubic meter for industries and
other institutional buyers.

The head of the marketing division of the state-owned gas
distributor Perusahaan Gas Negara (PGN), Hari Pratoyo, said the
new price was effective as of Nov. 1.

"But the old price still will be applied for the sale of gas
to households," Hari said Tuesday at a workshop on PGN's profile
organized by the company and the Jakarta branch of the
Association of Indonesian Journalists.

He said the price of Rp 385 per cubic meter is being applied
to industrial and commercial customers consuming between 1,000
cubic meters and 300,000 cubic meters per month, while the tariff
of Rp 385 per cubic meter is for those using between 300,000
cubic meters and 5 million cubic meters.

The new prices are only being applied to customers in Jakarta,
Medan, Surabaya and Bogor, while customers in Cirebon and West
Java are still able to pay under the old tariff.

"Customers in Cirebon are excluded from the new prices because
they are mostly smaller industries. We are afraid they will
switch to other fuels if they pay a higher tariff," said Hari.

Industrial and commercial customers account for only 4 percent
of the company's 32,628 customers, but they consume 97 percent of
the total 163.22 million cubic meters of gas sold by the company
each month.

The company has 505 industrial customers, 886 commercial
costumers, and 31,237 household customers, as of last September.

He said the company raised the tariff to compensate for the
rising costs stemming from the sharp depreciation of the rupiah
against the U.S dollar.

Hari said the rupiah's depreciation against the dollar had
affected the company since 65 percent of the gas it bought from
the state-owned oil and gas company Pertamina was in dollars,
while the other 35 percent was in rupiah.

According to Hari, PGN has to pay 65 percent of the gas in
dollars because Pertamina bought it from its joint operation
contractors in dollars, while Pertamina was willing to sell the
other 35 percent of the gas in rupiah, because that amount was
produced by Pertamina.

The head of PGN's business and information assessment office,
Arsyad Rangkuti, said on the same occasion that despite the
current monetary crisis, PGN projected to increase its profit by
28.7 percent to Rp 103 billion by the end of this year, while its
revenue would rise by 32 percent to Rp 623 billion.

Its assets were projected to increase by 68 percent to Rp 1.1
trillion by the end of the year.

"The monetary crisis only has made PGN lose some potential
profit. Had the monetary crisis not happened, PGN would have
earned a much higher profit this year," Arsyad said.

PGN currently has 1.73 million kilometers in its gas
distribution network throughout the country as of last September,
up from 1.6 million kilometers last year.

According to Arsyad, PGN was scored by the Development and
Finance Control Board (BPKP) as a very healthy company from 1992
to 1995 and a healthy company in 1996. (jsk)