LPG price to soar to Rp 6,000/kg

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