Following the news from Bloomberg, the summarized key points:
1.. The Government has agreed the gas price hike, but only up by 9.7% =
POSITIVE, though it's below PGAS' request of 10%, 9.7% hike is pretty
good.
2.. The formula for gas price will be based on the regulated diesel oil
price, which the ceiling price set at US$7/mmbtu = POSITIVE, it means
more room for the future gas price hike.
3.. New gas price will be applied to all areas, except North Sumatra =
POSITIVE, largest gas customers are in West and East Java
Note that:
a.. There is no formal statement from PGAS just yet.
b.. Gas price hike is to be applied on industrial customers
c.. Gas price hike will be effective starting by August 1, 2007.
d.. PGAS charged industrial customers at US$5.0/mmbtu.
e.. PGAS will announce the 1H'07 result by the final week of August,
according to our last correspondent with the company this morning.
Bloomberg news:
Aug. 1 (Bloomberg) -- PT Perusahaan Gas Negara, Indonesia's biggest
gas distributor, won government permission to increase
the price of the fuel to factories and utilities by 9.7 percent, an energy
ministry official said.
Gas Negara can raise the price to about $5.49 a million British
thermal units for all areas except North Sumatra
province, Luluk Sumiarso, director general of oil and gas, said in a
mobile phone text message today. The new price is valid
starting today, he said.
The government on June 26 challenged Gas Negara's plan to raise
prices 10 percent, saying that it's the energy ministry's
right to set prices for oil-based fuels and natural gas. The distributor
wants to apply the third price increase in two years
to recoup costs after state oil company PT Pertamina boosted charges for
some gas supply.
The energy ministry may set the formula to determine future increases
based on the regulated diesel price, government
officials said last month. The ceiling price for the fuel may be at $7 a
million British thermal unit, the officials said.
Gas Negara raised prices 15 percent in October 2005 and 10 percent in
January 2006, to $5 a million British thermal unit.
Best Regards,
