Pertamina raises LPG prices

State owned oil and gas company PT Pertamina has raised prices of subsidized liquefied petroleum gas (LPG) for 6-kg cylinder, 12-kg cylender and 50-kg cylinder by Rp 100 per kg to Rp 53,100 Rp 70,200 and Rp 367, 750 respectively.

The new price begins affective today (Saturday).

Pertamina?s spokesman Basuki Trikora Putra said in Jakarta on Friday that Pertamina had received an approval from the government to increase the LPG prices. ?The increase in the price is needed to cope with the surge in LPG prices in international market,? he added.

Pertamina, however, retains the price of the 3-kg LPG which is subsidized by the government. The government only subsidizes the sales of gas sold in the 3-kg canister, part of the program to convert the highly subsidized kerosene to LPG which is relatively cheaper.

With the rise, Pertamina will be able to gradually reduce the company?s loss from the sales of the unsubsidized LPG. The company has said that it has suffered a loss of Rp 2,854 per kg from the sales of the LPG. According to the company the price of LPG in the 12-kg canister (cyliender) should be raised to at least Rp 7,675 per kg to reach its market price.

In addition to selling LPG in a 12-kg canister, Pertamina also sells the gas in a 3-kg and 50-kg canister. The government only subsidizes the sales of gas sold in the 3-kg canister, part of the program to convert the highly subsidized kerosene to LPG which is relatively cheaper. (Kanti)