PGN, Asaki at odds over special treatment
Leony Aurora, The Jakarta Post, Jakarta
Ceramics producers will receive special treatment from state gas distributor PT Perusahaan Gas Negara (PGN) to cushion them from the recent increase in the price of natural gas, the Indonesian Ceramics Industry Association (Asaki) has claimed.
Members of the association will be able to postpone payment of the incremental toll fee to next year, Asaki chairman Achmad Wijaya said on Wednesday.
"We have agreed with PGN to pay the incremental toll fee in installments between January and June next year," said Achmad in a telephone interview made after a meeting with PGN.
PGN raised prices of natural gas by 15 percent to US$4.50 per million British thermal units (mmBtu) -- comprising the gas and toll fee -- from $3.90 per mmbtu on Oct. 15.
The price of gas rose to $3.30 per mmbtu from $2.90 per mmbtu previously, while the toll fee jumped by 52.5 percent to Rp 450 (about 4.5 U.S. cents) per million standard cubic feet (mmscfd) from Rp 295 per mmscfd. According to Asaki, ceramics producers could pay the additional Rp 155 per mmscfd next year.
PGN's corporate secretary Widyatmiko Bapang, however, denied that such an agreement had been reached.
"They (Asaki) accepted the price rise after we explained the circumstances," said Widyatmiko. "There is no postponement of payment whatsoever."
It is unclear whether other associations or companies have requested similar treatment as reportedly given to Asaki.
Minister of Industry Andung Natamihardja and Minister of Energy and Mineral Resources Purnomo Yusgiantoro have both requested that PGN not raise its prices, in light of current state of the economy.
PGN, which is 59 percent owned by the government, reasoned that it needed the hike. It argued that the price of gas was determined by commercial values, not by the government, and that it was still lower than oil-based fuels.
The publicly listed company plans to raise prices by another 11 percent in January, said Widyatmiko.
"Asaki has also approved the next price hike." he said.
Achmad said that the meeting concluded that the following price hike would be further discussed early next year, meaning that it would be delayed from PGN's original plan.
"I don't know when the subsequent increase in price will take place. We hope PGN will agree to postpone it to early 2007," said Achmad.
According to Asaki, ceramics producers, for whom natural gas is a vital raw material, consume some 40 percent of industrial gas supplied by PGN.
In the first half of the year, PGN booked an audited net profit of Rp 346.76 billion, more than triple the Rp 111.48 billion recorded in the corresponding period in 2004, on higher sales and lower currency losses.
Revenues in the first six months of 2005 rose to Rp 2.53 trillion from Rp 2.11 trillion in the same period the previous year.