Pertamina raising LPG prices to cut loss
Thursday, January 2 2014 - 08:18 AM WIB
?Starting Jan. 1, 2014, Pertamina has applied new prices for non-subsided LPG sold in 12-kg container across Indonesia with an average increase of Rp 3,959 per kg at end buyers. The amount of the increase varies depending on the distance between the LPG storage stations and supply points,? Vice President for Corporate Communication Ali Mundakir said in a statement on Wednesday.
He noted that despite the price increases, Pertamina will still suffer losses from selling the fuel, which is mainly used for cooking at households.
He said Pertamina has always suffered losses from selling the fuel. The losses have however increased last year due the rising price of the fuel on the international market amid the sharp depreciation of the rupiah against the dollar.
The procurement price paid by Pertamina for one kilogram of LPG now reaches Rp 10,785, compared to the price of Rp 5,850 charged by Pertamina since October 2009 on the buyers of 12 kg LPG. With the new price, Pertamina will still suffer Rp 2,100 per kg in losses from selling the fuel in 12-kg container.
Aside from the 12-kg container, Pertamina also sells LPG in 3-kg containers for poor household and small streetside businesses at lower price. Pertamina however does not suffer losses from the sale of the fuel in such type of container since it is subsidized by the government.
Ali noted that LPG consumption in 12 kg containers reached 977,000 tons last year, and Pertamina lost Rp 5.7 trillion from the business, compared total losses of Rp 7.73 trillion suffered by the firm from the business over a 20 month period from 2011 through October 2012.
?In the past six years, the losses totaled Rp 22 trillion,? Ali said.
He said the price increase is a purely corporate action taken based on the recommendation from the Supreme Audit Agency (BPK) and the action has been earlier communicated with the Ministry of Energy and Mineral Resources.
Editing by Johannes Simbolon