Govt Owes Rp1.4tn Debt to Fertilizer Companies

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  • Menteri BUMN Dahlan Iskan (tengah) saat menandatangani karung yang berisikan pupuk didampingi (dari kiri kekanan) Direktur Pupuk Iskandar Muda Usman Mahmud, Dirut Pupuk Kujang Tosin Sutawikara, Dirut Petrokimia Gresik Hidayat Nyakman, PT Pupuk Indonesia Holding Company Arifin Tasrif, Dirut Pupuk Sriwidjaja Palembang Eko Sunarko, dan Dirut Pupuk Kaltim Aas Asiki Idat dalam peresmian nama dan logo baru induk lima BUMN Pupuk di Plaza Pupuk Kaltim, Jakarta, Rabu (18/4). TEMPO/Eko Siswono Toyudho

    Menteri BUMN Dahlan Iskan (tengah) saat menandatangani karung yang berisikan pupuk didampingi (dari kiri kekanan) Direktur Pupuk Iskandar Muda Usman Mahmud, Dirut Pupuk Kujang Tosin Sutawikara, Dirut Petrokimia Gresik Hidayat Nyakman, PT Pupuk Indonesia Holding Company Arifin Tasrif, Dirut Pupuk Sriwidjaja Palembang Eko Sunarko, dan Dirut Pupuk Kaltim Aas Asiki Idat dalam peresmian nama dan logo baru induk lima BUMN Pupuk di Plaza Pupuk Kaltim, Jakarta, Rabu (18/4). TEMPO/Eko Siswono Toyudho

    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.

    JAYADI SUPRIADIN