Gov subsidy for LPG may reach Rp2.29 trillion

The amount of subsidy for liquefied petroleum gas (LPG) that the government has to provide may reach around Rp2.99 trillion in 2007 if the government has to subsidize the whole volume of distributed gas, including LPG excluded from the kerosene-LPG conversion program as state-owned oil and gas company Pertamina has requested, Kompas reported Wednesday.

Director general of oil and gas at the energy and mineral resources ministry Luluk Sumiarso said in Jakarta Tuesday that the figure (Rp 2.99 trillion) was the amount of potential losses put forwarded by Pertamina in regards to the calculated costs for the distribution of the whole volume of LPG started next year.

The costs did not include Rp 600 billion needed to provide stoves and gas tubes.

Luluk said that the real amount of subsidy that the government had to bear under the kerosene-LPG conversion program was around Rp1.93 trillion.

?However, if Pertamina wants the government to bear the whole costs, then this means there should be an additional subsidy of Rp1.06,? she said.

The government said that 988,280 kiloliters of kerosene is targeted to be replaced with 567,700 tons of LPG in 2007.

The price for LPG remains unchanged, at Rp4,250 per kilogram.

The daily said that the subsidy of Rp2.99 trillion proposed by Pertamina was calculated based on the prevailing LPG price at international market that sells LPG for Rp6,750 per kilogram. (*)