The local press today reported that the government and industry customers
have agreed on a 9.73% increase in PGN's gas selling price, to be effective
from 1 Aug 07. However, we have yet to receive PGN's confirmation on
this.
The news is indeed positive, as it implies the government is supportive of a price hike to still happen this year. Also, the increase (which will imply a resulting price of $5.49/mmbtu from the current $5.0/mmbtu) would be inline with the company's original target and our forecast.
Separately, the government & PGN continues to deliberate on a pricing formula to be the basis for future price adjustments - a conclusion on this is expected within August.
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