Pertamina postpones monthly increase in LPG prices

State-owned oil and gas company PT Pertamina has decided to postpone the company?s plan to gradually raise prices of liquefied petroleum gas (LPG) in 12 kg and 50 kg cylinders to their market levels beginning next month, Bisnis Indonesia reported on Monday.

?The plan to increase the LPG prices every month until they reach their economic value had been delayed until the condition is more conducive for such price increases,? Pertamina?s vice president for communications Wisnuntoro said in Jakarta last week.

Last week, Pertamina raised prices of its LPG in both 12-kg and 50-kg cylinders as an adjustment to surging production costs and higher crude oil prices.

In order to reduce its losses from the LPG sales, Pertamina plans to increase the price of the 12 kg-LPG by Rp 500 per month until it reaches its market price. The price of 50-kg LPG will be also increased gradually to reach market price.

Beginning August 25, LPG in a 12-kg cylinder is sold at Rp 5,750 per kg an increase from Rp 5,250 per kg while that of the 50-kg cylinder is Rp 7,255 per kg, rising from Rp 6,878 previously.

LPG sold in a 50-kg cylinder is widely used by businesses such as hotels, restaurants, hospitals, and luxury houses and a 12-kg is for household purposes.

The growing price disparity has caused the industrial and business users to switch to the 12-kg container. This has resulted in the shortage of the supply in the LPG in the 12-container. The price of the LPG in the 12-kg container has since increased sharply in the market. (*)