Indonesia May Scrap Price Approval Rule on Gas Negara (Update1) (Adds official's comments in fourth paragraph.) By Leony Aurora Aug. 5 (Bloomberg) -- Indonesia's energy ministry may scrap a rule requiring PT Perusahaan Gas Negara, the country's largest distributor of the fuel, to seek its approval on pricing agreements with factories and utilities. The government may also decide not to set a maximum price for the fuel, Evita Legowo, director general of oil and gas at the ministry, said by telephone today. The ministry plans to issue a regulation by the end of October, she said. The ministry's plan marks a reversal from last year when the government challenged Gas Negara's authority to increase prices by 10 percent to pass on higher fuel costs to consumers. The government is now trying to ``smoothen'' the way for gas supply deals to encourage more use of the fuel as crude oil soared to records this year. ``The prices should be determined by a business-to-business agreement,'' Evita said. The gas distributor climbed 2.4 percent to 2,175 rupiah at 2:48 p.m. in Jakarta today, outperforming a 3 percent decline in the benchmark index. Gas Negara and Luluk Sumiarso, formerly the director general of oil and gas at the ministry, previously agreed on a maximum price of $11.4 per million British thermal units. Evita replaced Luluk on July 18. The Jakarta-based gas distributor, 55 percent owned by the government, was granted permission to raise prices by 9.7 percent to an average of $5.5 per million British thermal units on Aug. 1 last year. The increase was its third in two years.
