The director general of oil and gas in the Ministry of Mines and Energy, Evita Legowo, said here on Friday that the Minister had officially approved the application for gas price increase and the new rates would come in effect from September 1.
"The gas prices in both upstream and downstream will increase in two stages, starting on September 1 ,2012, and then again on April 1, 2013," she stated.
"The downstream gas price will increase by 35 percent on September 1, 2012, and will rise a further 15 per cent on April 1, 2013," Evita added.
She noted that the price hike for upstream gas was yet to be announced.
"There is a load-sharing scheme between the upstream and downstream sectors. But I`m unable to mention the figures yet," Evita explained.
The load-sharing scheme was developed after industry protests over rising gas prices. State-owned gas distributor PT Gas Negara (PGN) raised gas prices by 55 percent, from US$6.6 billion per million British thermal units (MMBTU) to US$10.2 per MMBTU, on May 1, 2012.
On May 8, 2012, Minister of Energy and Mineral Resources Jero Wacik witnessed the signing of a memorandum of understanding [MoU] on gas price increase.
According to the MoU, the price of gas supplied to PGN by foreign contractor ConocoPhillips would increase from US$1.85 per MMBTU to US$5.61 per MMBTU, up 203 percent, while the price of gas from Pertamina EP was set to rise from US$2.23 per MMBTU to US$5.5 per MMBTU, up 147 percent.
The increase in prices of gas supplied by foreign contractors to PGN came into effect retrospectively from April 1, 2012.
However, after industry protests, the government decided to revise the PGN gas price hike and eventually reduced it from 55 percent to 50 percent.
After the revision, the national gas company also requested a revision of upstream prices.
Finally, the government decided to implement a scheme in which the load of the price hike would shared by the upstream and downstream sectors.
(A050/INE/B003)
Editor: Suryanto
Copyright © ANTARA 2012
