Pertamina raises LPG price for businesses

State oil and gas company PT Pertamina will increase the selling price of liquefied petroleum gas (LPG) for businesses by 46 percent to Rp 6,200 per kg from Rp 4,250 per kg on September 1, 2007.

 

Pertamina's Deputy Marketing Director Hanung Budya said in Jakarta on Wednesday that the increase aimed at reducing the company's losses arising from the sales of LPG.

 

Pertamina has suffered losses amounting to Rp 2 trillion - 2.5 trillion from LPG sales as the prevailing price has not reached the economic value, he said.

 

"The economic price of LPG remains above Rp 7,200 per kg. That means (with the new price) Pertamina will still subsidize LPG sale as much as Rp 1,000 per kg," he said.

 

Hanung also said that the new price would be applied to LPG sold in 50-kg containers, while the price of the commodity would remain unchanged if it is sold in 12-kg container. The 12-kg container is mostly used by households, while the 50-kg container is widely used by businesses such as hotel, restaurant, hospital, and luxury houses.

 

According to Pertamina's data, national consumption of LPG in totals 1.1 million tons per annum. (godang)