Jakarta, April 17 (Antara) - Indonesia is now going all out in developing its agricultural sector to increase food products, rice in particular, in efforts to maintain its food resilience and achieve food self-sufficiency.
Towards this end, fertilizer plays a central role in boosting agricultural products. However this commodity still lacks competitiveness in the face of imported one as fertilizer industry at home uses gas in its production process.
Moreover, gas sold to fertilizer and petrochemical industries is still expensive, notably about US$6 per million metric british thermal unit (mmbtu), or far higher than that of overseas where fertilizer and chemical industries purchase gas with an average price of $2 per mmbtu.
The relatively high gas price supplied to domestic fertilizer and chemical industries weakens the competitive edge of fertilizer against the same product imported from other countries.
Hence, lawmaker Dito Ganinduto, a member of Commission VII on energy affairs of the House of Representatives (DPR) urged the government to protect national fertilizer industry by lowering gas prices sold to industry so that fertilizer industry at home could compete with imported fertilizers.
"We have gas but it is still inefficient because the selling price of gas to industry is expensive," Guninduto said in Jakarta on Thursday.
Currently, national fertilizer and petrochemical industries use gas as raw material in their production process but the price of gas for industry is still expensive and made local products unable to compete with imported goods.
The lawmaker also expressed hope that the gas sale price would be cut to below $6 per mmbtu as it was once promised. Gas and petrochemical industries still purchase gas at $6 per mmbtu.
"This should be made clear soon. The price of fertilizer for fertilizer and chemical industries should be made clear soon. The normal one is that the price of gas for fertilizer and chemical industries should be at a maximum of $3 per mmbtu. As such, fertilizer industry at home can compete with imported fertilizers," Guninduto, who is a Golkar Party politician, said.
Currently, fertilizer and petrochemical industries overseas buy gas at a price of $2 per mmbtu, so that their production could grow in a competitive manner.
If industries here purchase gas at a price of $6 per mmbtu, it will be very heavy for them and could weaken the goods competitive edge. Therefore, certain prices of gas should be given soon to industries.
Other legislator Harry Purnomo of the same Commission said that in order to support the competitive edge of the national fertilizer industries, it had better to revoke fertilizer subsidies.
After all, fertilizer consumers such as farmers and other industry players can get capital support and other facilities so that they would always maintain their purchasing power, though the fertilizer price will continue to fluctuate in line with the drop in the price of gas.
"But the price of fertilizer should also be at a fair level. On the other hand, the farmers should get marketing assistance, capital and technology. Subsidized goods are often misappropriated. It is a fact that there are many cases in the misappropriation of subsidized goods," remarked Purnomo.
Apart from that, the gas infrastructure in various industry locations should also be improved so that supplies to fertilizer and petrochemical industries can be smooth and the retail price of gas can indirectly be reduced.
One of gas producers that would provide gas output to fertilizer industry is the Muara Bakau Block in East Kalimantan. The Muara Bakau Block will also distribute gas for electricity generation.
According to the Upstream Oil and Gas Regulator (SKK-Migas), the gas output from the Jangkrik field in the Muara Bakau Block will be utilized for electricity generation and fertilizer industry.
Head of SKK Migas Amin Sunaryadi stated last month that 52 percent of the gas will be delivered to state-owned oil and gas firm Pertamina, which has already signed a gas sales agreement with the operator of the block, Eni Muara Bakau BV. About 10 percent of the gas output will be delivered to the fertilizer industry in East Kalimantan.
"Pertamina has an agreement with PLN (state-own electricity firm). Another 38 percent will be supplied to ENI midstream," Sunaryadi remarked.
Pertamina will ration 1.4 million tons per year and will receive gas supply for seven years, starting 2017.
Energy and Mineral Resources Minister Ignatius Jonan pointed out that the Jangkrik Field in the Muara Bakau Block, East Kalimantan, has a capacity to produce 450 million standard cubic feet per day, or equivalent to six to seven percent of Indonesia's total natural gas production.
Apart from using gas, farmers can also increase production by using organic fertilizers produced from cattle waste. For instance, a group of farmers in Barito Kuala District, South Kalimantan Province, has transformed cattle waste into organic fertilizer which could boost production by 20 percent.
The community in the district's Dandan Jaya Village had previously been affected by two problems, namely pollution from the cattle waste and farmers' lack of income as harvest season occurred only once a year. Yet, the organic compost production, which was supported by the province's livestock development bureau, has helped the community to overcome these problems.
The farmers could now produce at least 2 thousands kilograms of organic fertilizers, which could later be sold for Rp12 thousand for eight kilograms. "We have sought the government's help to support the compost development process, so that the cost of production and the price of fertilizers could be reduced," head of the farmers' group Sodikun said.
(A014/b003/B003)
(T.A014/A/A. Abdussalam/Bustanuddin) 16-04-2017 22:37 |
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