LPG price raised, others stable

LPG price raised, others stable

The Jakarta Post, Jakarta

State-owned oil and gas company Pertamina has raised the price
of liquefied petroleum gas (LPG), while leaving the prices of
other fuels unchanged.

Starting Friday, Pertamina will sell LPG for Rp 2,850 (33 US
cents) per kilogram, up Rp 150, or 5.5 percent, from the previous
price, in areas other than Batam.

For Batam, Pertamina will sell the product for Rp 3,500 per
kilogram, up Rp 800, or 29.6 percent, from the previous price,
Pertamina's general manager for LPG and special products, Iqbal
Hasan, said in a press conference on Thursday.

Pertamina deliberately sets higher prices for Batam to make
them similar to the prices in Singapore, thus discouraging the
smuggling of fuel to the city state.

LPG is widely used in urban households for cooking as an
alternative to kerosene. The fuel is usually sold in 12-kilogram
tanks, which based on the new pricing scheme will cost Rp 34,200,
compared to Rp 32,400 previously.

Iqbal said Pertamina was forced to raise the price in a bid to
cut its losses, saying that the firm had been losing money in the
LPG business for the past several years.

Last year, the firm booked a loss of Rp 565 billion from LPG
trading, and in the first semester of the year the losses reached
Rp 102 billion.

"As the result of the new pricing scheme, we hope to reach a
breakeven point in LPG trading in the second semester of the
year," he said.

Citing the same reason, Pertamina raised LPG prices twice last
year, in July and December, a move which drew public protests.

Iqbal also said that in order to promote the wider use of LPG
by the public, Pertamina would cut the price of LPG tanks by 35
percent to Rp 135,000 per unit from Rp 250,000 per unit
currently.

On the same occasion, Pertamina also announced that the prices
of oil-based fuels would remain unchanged in August.

Thus, the retail price for Premium gasoline stays at Rp 1,810
per liter, while the retail prices of gasoline, automotive diesel
oil, industrial diesel and fuel oil remain at Rp 1,800, Rp 1,650,
Rp 1,650 and Rp 1,560 per liter respectively.

Pertamina is authorized by the government to raise or cut oil-
based fuel prices every month in line with international prices.