Kerosene switch to LPG difficult without subsidy: Pertamina

State-owned oil and gas company PT Pertamina is pessimistic about the smooth running of the program to shift subsidy money from kerosene to liquefied petroleum gas (LPG) after the government said that it is not going to give subsidy for LPG price to Pertamina.

?If you want to develop the program, it will be very difficult without government subsidy. Currently the LPG selling price is Rp 4,250 per kilogram whereas the market price is much higher than that,? Pertamina?s president director Ari H Soemarno said after attending the 61st anniversary of Indonesia?s Independence Day celebrations at his office in Jakarta on Thursday.

He said Pertamina had several times asked the government to find a way out.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that next year the government will not allocate any subsidy for LPG. But he said Pertamina must run the conversion program with or without subsidy.

?At present, the LPG price is not determined any more by the government but by corporate (mechanism). If you ask me whether there is a subsidy or not, the answer is not ,? Purnomo said.

Coordinating Minister for Economy Boediono has also said that program to convert from kerosene to LPG was included in the 2007 Budget? subsidy program.

?But it is not meant for subsidizing LPG price. Government has allocated the money (subsidy) only for stoves and gas cylinders ,? Boediono said.

According to Boediono, the selling price of LPG must be the same with the price set by PT Pertamina, which is now at Rp 4,250 per kilogram. (godang)