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Gas shortage could cripple industries
A gas supply shortage predicted to hit the country next year may force industries, especially producers of chemical-based products, to lower output and layoff staff, executives from the government and private sector say
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A gas supply shortage predicted to hit the country next year may force industries, especially producers of chemical-based products, to lower output and layoff staff, executives from the government and private sector say.
Achmad Widjaya, chairman of the Indonesian Ceramics Association (ASAKI), said 40 ASAKI members were dependent on gas, consuming between 107 and 115 million standard cubic feet per day combined, and that they could not easily shift to fossil fuels.
"Our products will be stained with ash and won't sell at the market if we use coal, and we cannot use diesel fuel LPG (liquefied petroleum gas) because it is too expensive," Achmad said over the weekend.
Experts have said industries could suffer a gas deficit next year of up to 200 billion British thermal units per day (BBtud) due to state power company PLN's plan to buy more gas from PT PGN.
Achmad said the plan, if realized, would affect hundreds, if not thousands of workers in the industry and might force up to 27 ASAKI members in West Java and East Java to shut down.
PLN plans to increase gas usage next year as part of its plan to convert two of its largest fossil fuel power plants, Muara Tawar and Tanjung Priok, to gas to reduce costs by more than Rp 5 trillion (US$531 million).
Indonesian Textile Industry Association secretary general Ernovian G. Ismy said the shortage might damage the labor-intensive industry, forcing textile manufacturers to slash output.
"PGN's move will also affect our set plan to use fossil fuels amounting to 70 percent of our total energy demand by 2015, with the remaining 30 percent electrical demand," he said.
He said 30 percent of the textile industry's energy demand was met by burning fossil fuels.
Dedi Mulyadi, head of the Industry Ministry's industrial research and development agency, said the gas shortage would affect numerous industries, including producers of chemical-based products.
"We have yet to calculate the extend of the impact, but the chemical-based industries will suffer most," he said.
"The fertilizer industry, part of the chemical-based industry that uses gas as a raw material, typically has gas contracts with PGN to ensure supply," he said.
Agus Tjahjana, the ministry's secretary general, said the ministry would try to find solutions to avert the potential crisis, adding that it would group relevant parties to discuss the matter.
PGN president director Hendi Prio Santoso said a day earlier that industries would need on average compensation of Rp 8 trillion for every 100 million cubic meters of gas not supplied.
