Pertamina raises LPG prices<\/p>\n
JAKARTA (JP): State-owned oil company Pertamina has increased
\nthe prices of liquefied petroleum gas (LPG) and asphalt,
\nprompting fears that the move will push this year's inflation
\nrate higher than expected and force people to turn to substitute
\nfuels, such as kerosene.<\/p>\n
Pertamina announced here yesterday that it had increased the
\nprice of LPG -- widely used here for cooking -- by 33.3 percent
\nto Rp 1,000 (44 U.S. cents) per kg as of Dec. 19.<\/p>\n
As of Dec. 4, the company also increased the price of asphalt
\nby about 15 percent to Rp 420,000 per metric ton.<\/p>\n
Pertamina public relations officer Didi Sunarwinadi said that
\nthe company had to raise the prices because of increases in
\nproduction costs over the past four years.<\/p>\n
The company produces its asphalt from crude oil imported from
\nthe Middle East. The steady depreciation of the rupiah against
\nthe U.S. dollar had, as a consequence, pushed production costs
\nup, Didi said.<\/p>\n
Pertamina said the price of LPG had to be raised due to the
\nhigher freight charges imposed by chartered tankers.<\/p>\n
Some observers criticized the move as contrary to the
\ngovernment's efforts to keep inflation in check.<\/p>\n
"The price increase is unexpected. It has the potential to
\npush up food prices and, as a result, cause higher inflation,
\nsince many households and restaurants use the gas for cooking,"
\nsaid Bachrawi Sanusi, an oil and gas analyst.<\/p>\n
According Bachrawi, the increase is also likely to encourage
\npeople to return to using kerosene, which costs about Rp 550 per
\nkg.<\/p>\n
"This will result in a surge in the number of kerosene
\nconsumers, which is against the government's policy of
\ndiversifying the sources of energy used in this country," he
\nsaid.<\/p>\n
Head of the Indonesian Consumers Foundation, Zoemrotin K.
\nSoesilo, said that Pertamina should have formally announced the
\nprice increase before it came into effect and that the retailers
\nof the gas should not have raised their prices ahead of the
\nannouncement. "But, in fact, retailers had already increased
\ntheir prices as of last week," she said.<\/p>\n
Didi said Pertamina did not announce the price rises until
\nyesterday in order to prevent speculation among dealers and
\nretailers.<\/p>\n
Pertamina's president, Faisal Abda'oe, said separately
\nyesterday that the price increases would not push up the
\ninflation rate, because Indonesian LPG consumers are still very
\nsmall in number and are located mainly in the major cities. (13)<\/p>",
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