PERTAMINA READY TO RAISE NON-SUBSIDIZED LPG PRICE

Non-subsidized LPG in 12-kg cylinders

Jakarta Forum - Jakarta, State oil and gas firm PT Pertamina said on Monday it was ready to raise the price of non-subsidized liquefied petroleum gas (LPG) this year to reduce losses from the sale of the fuel.

The current price of non-subsidized LPG was far below its economic price, Pertamina marketing and commercial director Achmad Faisal said.

The economic price of LPG currently reached around Rp8,000 a kg, while the price of non-subsidized LPG in 12-kg cylinders was only Rp5,850 a kg, he said.

"This has made Pertamina suffer losses from the sales of non-subsidized LPG. We will raise the price merely to reduce the company`s losses," he said.

Last year Pertamina suffered a loss of Rp2.6 trillion from the sales of non-subsidized LPG.

The selling price of non-subsidized LPG in 12-kg cylinders currently reached Rp5,750 a kg, well below its production cost of Rp7,500-8,000 a kg, he said.

However, the company had yet to decide by how much and when exactly the price of non-subsidized LPG would be raised, he said.

"To be sure, the price will be raised in stages this year," he said.

Last year Pertamina planned to raise the price of non-subsidized LPG by Rp500 a kg every quarter. But the plan drew resistance from the public and parliament which asked the government to review it.

The price of non-subsidized LPG was later raised by Rp100 a kg.

With the increase, Pertamina last year suffered a loss of Rp2.6 trillion from the sales of non-subsidized LPG in 12-kg cylinders, Pertamina senior vice president for marketing and commerce Hanung Budya Yuktianta said.

Hanung said the planned gradual rise in the price of non-subsidized LPG would not cause inflation as was the case with the sales of non-subsidized fuel oils which fluctuated.

Source: Antara News