Pertamina proposes LPG price hike

State-owned oil and gas company PT Pertamina has proposed to the government an increase in the price of liquefied petroleum gas (LPG) sold in a 12-kg cylinder to cope with the rise in the LPG price in the international market.

Pertamina spokesman Basuki Trikora Putra said in Jakarta on Thursday that the proposed rise in the price of LPG in a 12-kg cylinder would be needed in order to prevent the government?s subsidy from swelling further.

At present, the price of LPG sold in a 12-kg cylinder is Rp 5,250 per kg ( 1US$ = Rp 9,900).

Minister of Energy and Mineral Resources Purnomo Yusgiantoro confirmed that he had received the price increase proposal.

He said that the government had not yet made any decision about the proposal. But, he added that if the price is maintained at the current level, the government is committed to covering the price gap from the market price level so that Pertamina would not suffer a loss.

Pertamina sells LPG in three sizes of cylinders -- 3-kg cylinder, 12-kg cylinder and 50-kg cylinder.

Pertamina distributes LPG in 3-kg container as part of the government?s kerosene- to- LPG conversion program to poor families and 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. (godang)