Pertamina plans to increase LPG imports
Saturday, January 7 2006 - 02:13 AM WIB
Pertamina's general manager for domestic gas sales, Edwin Bakti, said in Jakarta on Friday that the oil and gas company was still calculating the volume of the extra LNG import which would be needed to cope with the decline in the local supply during the closure of the Balongan refinery.
He said that the Balongan refinery which produces about 1,200 tons of LPG per day would be temporarily closed for two weeks during the refinery's routine maintenance or turnaround works in the middle of February.
The temporary closure of the refinery would result in the decline in the supply for the national needs which reach about 3,500 tons per day. About 2,500 tons of the LPG needs are provided by Pertamina's own refineries including the Balongan refinery, while the remaining 1,000 tons are supplied by private producers and imports.
Edwin, however, said that the increase in the LPG imports would further increase the company's losses from the sales of LPG, which is at present sold at Rp 4,250 per kg or below the production costs.
With the the price of LPG at overseas market reaching about US$700 per ton, the average price LPG would be about Rp 7,000 per kg, far exceeding Pertamina's selling price of Rp 4,250 per kg.
According to him, Pertamina has suffered losses of about Rp 28 billion per month from the sales of LPG. The company planned to raise the LPG prices several months ago to offset the deficit from the sales of the LPG but it later delayed the price increase plan to avoid angers from its consumers who have been hard hit by the sharp increase in fuel prices in October.
Edwin said that Pertamina was hoping it would be able to increase the LPG prices by an average of 40 percent early this year to help reduce the losses. (*)