LPG price to soar to Rp 6,000/kg

State oil and gas firm PT Pertamina will raise the price of liquefied petroleum gas (LPG) by 41 percent early next year to Rp 6,000 (60 U.S. cents) per kilogram from the current Rp 4,250 per kg.

Pertamina's LPG marketing assistant manager Rosidi Hasyim said on Thursday that the firm had suffered a financial loss of Rp 900 billion per year because the domestic LPG price was lower than the international price. LPG is not subsidized by the government and will have to conform to market prices.

He said the new price would allow Pertamina to get Rp 200 profit per kilogram of LPG.

"We are awaiting the board of directors' approval," he was quoted as saying by detik.com during a media gathering in Anyer, Banten.

"The profit will be distributed to our agents so that they don't cheat customers that in the end will tarnish the image of Pertamina," he said.

In August, Pertamina had said it would raise the LPG price to Rp 5,000 per kg.

A 12-kg tank of LPG is officially sold at Rp 51,000 but in the market the price could reach Rp 60,000 per tank. Agents charge higher prices to cover the rise in transportation costs after the government increased fuel prices on Oct. 1.

Pertamina raised the price of LPG last December by 42 percent from Rp 3,000 per kilogram. LPG in Batam, however, was increased to Rp 4,800 per kg from Rp 3,500 per kg previously due to its status as a bonded zone.

Indonesia's annual production of LPG stands at between 3.5 million tons and 4 million tons. Half of this is sold into the domestic market. Pertamina expects to sell 1.2 million metric tons to households and industry this year. -- JP