LPG price to increase by 20%: Pertamina

Leony Aurora, The Jakarta Post, Jakarta

State oil and gas firm PT Pertamina plans to raise the price of liquefied petroleum gas (LPG) by 20 percent this year to over Rp 5,000 (about 51 U.S. cents) per kilogram from the current Rp 4,250.

Pertamina's trading and marketing director Ari Soemarno told reporters on Monday the prices for the commodity in the international market had risen substantially over the past months.

"We are still considering the timing (for the price hike)," said Ari. LPG, he said, is not subsidized by the government and will have to conform to market prices.

Head of domestic gas sales Edwin Bakti said that the company was still studying the planned price hike. "But it will most likely be done this year, as the (global) prices have risen significantly," said Edwin.

He further explained that the current retail price of LPG was based on international prices of about US$300 per metric ton, while now they have gone up to about $400 per metric ton.

Indonesia produces between 3.5 million tons and 4 million tons of LPG in a year, of which less than half is sold to the domestic market. Pertamina expects to sell 1.2 million metric tons in the country to households and industries this year.

Pertamina raised the price of LPG in December last year by 42 percent from Rp 3,000 per kilogram. LPG in Batam was increased to Rp 4,800 per kg from Rp 3,500 per kg previously.

The price of LPG in Batam is exclusive to the island, due to the island's status as a bonded zone area.