Indonesian Industries Reel from PGN's Gas Supply Restrictions
Industry players in Indonesia are warning that gas supply restrictions imposed by state-owned Perusahaan Gas Negara (PGN) could have serious consequences for output and jobs.
The Natural Gas Users Industry Forum (FIPGB) has reported that from September 1 to 13, businesses only received around 80% of their natural gas requirements. From September 14 onwards, supplies were reduced further to about 78% of contracted minimum volumes under the Specific Natural Gas Price (HGBT) scheme.
FIPGB chairman Yustinus Gunawan said that the decline in natural gas supply has had a chain effect that is severely hurting industries. 'The shortfall is raising energy costs, as gas consumed beyond HGBT allocations can be charged at prices of up to $15.6 per million British thermal units (MMBtu', he noted.
Industries have also been forced to cover shortages with more expensive liquefied natural gas, adding to cost pressures amid a weaker rupiah.
Ceramic manufacturers, in particular, are struggling due to the essential nature of gas for their furnaces. Indonesian Ceramic Industry Association (Asaki) chairman Edy Suyanto said that several companies have reduced production capacity by 40% to 50% because of gas shortages.