Pertamina raises LPG price once again
Pertamina raises LPG price once again
A'an Suryana, The Jakarta Post, Jakarta
Defying public concern, state oil and gas company Pertamina
raised again the price of liquefied petroleum gas (LPG) to Rp
32,400 (US$3.64) per tank from Rp 28,800 per tank (each tank
holds 12 kilograms of LPG).
The company said that the new price would be effective as of
Saturday.
It was the second increase this year, after Pertamina raised
the price of LPG last July from Rp 25,200 per tank to Rp 28,800
per tank.
Pertamina, which has a monopoly over Indonesia's LPG market,
said on Friday that the price hike was aimed at reducing
Pertamina's losses in the LPG business here.
It pointed out that the company had been selling the commodity
at a loss for quite some time because the government had already
revoked its subsidy.
"The commercial price stands at Rp 3,000 per kilogram (or Rp
36,000 per tank), but we have been selling it at below cost so
far," said Iqbal Hasan, Pertamina's general manager for LPG and
special products at a press conference here.
He said the price hike could reduce the company's losses,
which are estimated to stand at Rp 700 billion this year.
The new price applies for LPG sold in a 60 kilometer radius
from the nearest Pertamina LPG station.
Transportation fees would be imposed for customers requesting
LPG outside the 60 km radius.
The price hike applies for LPG used by households, while for
the transportation sector, Pertamina failed to spell out whether
or not there would be a price hike.
For the transportation sector, the price currently stands at
Rp 1,600 per liter.
Although the public would certainly bear the burden of the
price hike, Iqbal defended the policy saying that it was a normal
business decision and that such decisions were common in other
countries.
He said that other countries like Thailand, Malaysia, and
Vietnam had imposed an even higher price for LPG sold to the
public.
In the three countries, the price of LPG was Rp 4,000, Rp
3,600 and Rp 5,300 per kg respectively, well above the Indonesian
price.
In a bid to appease the public, Pertamina said the company
would compensate the public for the price hike with some
additional services.
These included efforts to improve the quality of the LPG tanks
produced by the company.
The Indonesian Consumers Foundation (YLKI) had strongly
protested the previous price hike. It had even filed a class
action lawsuit last July against Pertamina.
Although the court has yet to issue its final ruling on the
case, Pertamina moved ahead with the second price hike.
LPG is widely used by middle to upper class households in
major cities. The amount of LPG sold in Indonesia reaches one
million metric tons per year. In Jakarta alone, there are some
200,000 households using LPG for cooking.