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Pupuk Indonesia Demands for Gas Price Cut  

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17 October 2017 07:02 WIB

PT Pupuk Indonesia Holding Company (PIHC). TEMPO/Eko Siswono Toyudho

TEMPO.CO, Jakarta - State fertilizer company Pupuk Indonesia made another request to the government to lower gas prices for fertilizer production. The company said that international prices are less than US$3 per ton, much cheaper than in Indonesia, which is more than US$6 per ton.

"We have submitted [the request] to the State-owned Enterprises Ministry and the Industry Ministry," Pupuk Indonesia president director Aas Asikin Idat in Jakarta, Monday.

Aas said gas is the largest production component in the fertilizer industry, accounting for 70 percent of total production costs. Fertilizer producers, he said, still have to pay for gas even if they don’t use them, because the commodity can only be purchased with a take-or-pay system.

"We still have to pay because the contract says that 85 percent must be used," he said.

Aas said the biggest challenge of Indonesian fertilizer producers is to compete with international sales prices, which is around US$200 per ton. Meanwhile, the sales price of Indonesian fertilizers can reach up to US$ 260 per ton due to high production cost.

The SOE Ministry's deputy of agro and pharmaceutical industries Wahyu Kuncoro said that the state fertilizer industry's asset is around Rp130 trillion, "the biggest compared to other industries in the agro and pharmaceutical sectors".

IMAM HAMDI




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