TEMPO.CO, Jakarta - The government has yet paid the fertilizer subsidy that amounts to Rp1.4 billion (US$116.7 million) to PT Pupuk Iskandar Muda (PIM) for three years, PIM president director Eko Sunarko said on Sunday, September 14, 2014.
Government’s unpaid debt to the company has become another problem for the company. Earlier, the company has been burdened by the increasing gas price.
“We bought gas at US$10.5 per MBTU, while the maximum price for fertilizer is US$7 per MBTU,” Eko said.
Currently, the production cost of one kilogram urea is at Rp2,700 or Rp2.7 million (US$225) per hectare. The production cost is far higher than the selling price to the government that was set at Rp1,800 per kilogram or Rp1.8 million (US$150) per hectare. The price difference was to be covered by the government subsidy.
In addition to PIM the government also has not paid its subsidy debt to other fertilizer companies. In total, the government’s subsidy debt to PT Pupuk Indonesia Holding Company is at Rp16.7 trillion (US$1.4 billion), which accumulated from 2010 to 2013. Pupuk Indonesia as the holding company had to bear the interest rate and the hampered fund for new investments.