Pertamina raises non-subsidized LPG price by 25%

By Godang Sitompul

State owned oil and gas firm PT Pertamina has raised the price of non-subsidized LPG sold in 12-kg canister from Rp 6,069 to Rp 7,569 per kg, an increase of Rp 1,500 per kg or 25 percent, effective today (Wednesday).

The price was increased by Pertamina after ?receiving inputs from the government during a coordinating meeting at the coordinating ministry of the economy on Sept. 8,? Pertamina?s VP for Corporate Communication Ali Mundakir said in a statement.

After adding the transportation costs, filing fee, wholesaler margin and value added tax, retail price at wholesalers will increase to Rp 9,519 per kg or Rp 114,000 per canister. Previusly, the wholesaler price was Rp 7,731 per kg or Rp 92,800 per canister.

Despite the increase, the selling price of 12-kg LPG is still below the economical level. The CP Aramco price averaged US$891.78 per metric tons in June 2014 year-on-year. After adding other cost components and assuming $1 is equal to for Rp 11,453, the 12-kg LPG should be sold at Rp 15,110 per kg or Rp 181,400 per canister.

Thus, with the price increase, Pertamina will not get profit from the sale of 12-kg LPG. Instead, the firm will be able to reduce its loss from the business by Rp 452 billion to Rp 5.7 trillion from the earlier projection of Rp 6.1 trillion. The loss is still higher than the firm?s 2014 budget which set the loss at Rp 5.4 trillion on the assumption of CP Aramco price at $833 per metric ton and a dollar exchange rate at Rp 10,500, Pertamina said.

Editing by Johannes Simbolon