Govt to speed up kerosene-to-LPG conversion program

Vice President Jusuf Kalla said Wednesday that the government would speed up the program to replace the use of kerosene by households with liquefied petroleum gas (LPG) to four years from six years as originally planned in order to reduce the costly subsidy allocated for the sales of kerosene.

Speaking to reporters after visiting Pertamina's headquarters in Jakarta, Kalla said that the government hoped that within the four year-program, 90 percent of about 10 million kilo liters of kerosene used by households a year could be replaced by LPG.

"If the program runs as expected, the government can save up to Rp 30 trillion from the subsidy payment," he said.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in Jakarta Saturday that the government would provide a subsidy for the sales of LPG to households as part of the program.

According to him, the subsidy for the LPG sales would be taken from the kerosene subsidy which had been already allocated in the state budget. The total amount of the subsidy allocated for the sales of kerosene is estimated to reach Rp 54.7 trillion this year.

At present, LPG is sold at Rp 4,250 per kilogram, while its market price is about Rp 6,000 and Rp 7,000 per kg. (Godang)