LPG scarcity strikes regions, leads to higher prices

Andi Hajramurni and Jon Afrizal, The Jakarta Post, Makassar/Jambi

Demand for liquefied petroleum gas (LPG) has been on the rise in the regions after the government increased fuel prices by an average 126 percent. The high demand, compounded by distribution problems by state oil and gas company PT Pertamina, has led to LPG scarcity and an increase in price for the product in the regions.

Spokesman for PT Pertamina Makassar operations Najamuddin said on Tuesday that the rising demand for LPG had started a week before the fuel price hike on Oct. 1, with the demand increasing by 50 percent compared to normal.

Previously, demand for LPG was between 148 and 150 metric tons a day, but a week before the government increased the fuel price demand rose to between 230 and 240 metric tons a day, said Najamuddin. "The public has apparently anticipated the increase in fuel prices by buying more LPG for cooking," said Najamuddin.

In order to prevent irresponsible parties from hoarding the LPG for their own gain, Pertamina's Makassar office has limited the sale of LPG at a level 150 metric tons a day.

He said LPG stocks in Makassar would be adequate until Idul Fitri (Nov. 3 and 4) with some 1,500 metric tons arriving from Bontang, Kalimantan on Thursday.

So far, Pertamina's Makassar operation has sold 643,327 12kg bottles of LPG, while 16,389 50kg LPG bottles have been sold.

The rising demand for LPG in Makassar has led to an LPG shortage in the city, causing suppliers to increase prices to Rp 60,000 per 12kg bottle, above the normal price of Rp 51,000 per bottle.

"The demand has been on the rise while supply from Pertamina has been on the decline, prompting us to raise the price of LPG," said Aco, an LPG supplier.

Similarly, an LPG shortage has also hit the city of Jambi over the past few days, shortly after the government increased the fuel price on Oct. 1. "Supply from Pertamina has been decreasing to 50 percent over the past few days, leading into the LPG scarcity," said an LPG agent in the city.

Before the fuel price hike, the agent obtained LPG supplies amounting to 600 bottle a day, but after Oct. 1, the supply was reduced to 400 bottles.

The soaring demand for LPG in Jambi and South Sulawesi took place after the price of kerosene was jacked up 183 percent by the government. With the price of kerosene skyrocketing, housewives have turned to LPG as a cooking fuel.

Separately in Jakarta, Pertamina president director Widya Purnama said that his company would conduct market operations to drive down the LPG price. The company will also take stern measures against LPG agents selling gas above the ceiling price imposed by Pertamina of Rp 55,000.

Widya also promised that the company would not raise LPG prices until December this year.