Pertamina halts LPG import
Monday, September 6 2004 - 03:09 AM WIB
State oil company Pertamina has stopped importing Liquefied Petroleum Gas (LPG) because the increase in the LPG prices in the world market had caused the company to suffer losses from the LPG imports, Koran Tempo reported on Monday.
Pertamina's deputy president director Mustiko Saleh said in Jakarta last week that the decision to stop the LPG imports was made during the shareholders meeting in June.
According to him, the demand for LPG in the domestic market continues to increase from year to year. But the business is not so promising because the LPG price is still controlled by the government, making it difficult for the company to maintain healthy margins when international prices move up.
"If importing the LPG only causes Pertamina to suffer a financial loss, why should we continue," he said.
The increase in the crude oil has resulted in the surge in the price of the LPG in the world market to as high as Rp 5,000 per kg, while the price of LPG in the domestic market remains at about Rp 3,000 per kg. (*)