PGN to raise gas price next month

JAKARTA (JP): State gas distributor Perusahaan Gas Negara (PGN) will raise the price of natural gas for industrial and other commercial buyers by 16.9 percent to an average Rp 450 (6 U.S. cents) per cubic meter starting next month, the company said yesterday.

"The new price will be applied for next month's usage, with the next payment in March," company president A. Qoyum Tjandranegara said.

He said the price hike was part of an agreement between PGN and its industrial and commercial customers to adjust the price of the company's natural gas every three months with the change in the rupiah's value to the U.S. dollar.

Qoyum said the new price was set every three months by PGN and its customers in negotiations to reach a win-win solution amid the monetary crisis.

"If the dollar's value increases, the price of our gas will rise, but if the dollar decreases in value, our sales price will be lowered," Qoyum said.

Sixty-five percent of the gas was sold in dollars because state oil and gas company Pertamina bought the amount from its joint-operation contractors in dollars, while Pertamina was willing to sell the remaining gas in rupiah, because that amount was produced by Pertamina, Qoyum said.

Qoyum said PGN bought the gas sold in dollars from Pertamina at a rate of Rp 4,000 per dollar, but Pertamina had indicated it wanted a higher dollar rate.

The company last increased the price of gas by 22 percent in November to an average Rp 385 per cubic meter for industrial and commercial customers, but maintained the old price of Rp 315 per cubic meter for households.

Qoyum said PGN was still applying the old price of Rp 315 per cubic meter for household customers.

PGN sells natural gas in Jakarta, Medan, Surabaya, Bogor and Cirebon.

Industrial and commercial customers account for only 4 percent of the company's 32,628 customers, but they consume 97 percent of the total 163.2 million cubic meters of natural gas sold by the company each month.

Households account for 96 percent of PGN's costumers but consume only 3 percent of its natural gas supply.

PGN also has small operations in Bandung, Semarang and Ujung Pandang, but only sells liquefied natural gas there due to the absence of a natural gas supply from Pertamina to the towns. (jsk)