LPG scarcity strikes regions, leads to higher prices

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.