Pertamina to import 3-3.4 million tons of LPG

State oil and gas company PT Pertamina said on Monday it would import between 3 and 3.4 million tons of liquid petroleum gas (LPG) in 2009, if the government?s kerosene?to-LPG switching program was progressing well.

Ari said during a hearing with the House of Representatives?s Commission VII that the domestic refineries could only supply 50 percent of the domestic LPG demand in 2009, which was expected to stand at 6.8 million tons.

?The remaining 3 and 3.4 million tons have to be imported,? he said.

The domestic LPG demand is expected to rise to 6.million tons in 2009 on the assumption an annual kerosene consumption of 10 million kiloliters have been switched to LPG that year. Currently, LPG consumption reaches 1.02 million tons per year.

LPG is mostly used as cooking fuel at middle-upper class households in urban areas, while kerosene is used for cooking by low-income group of people.

The government has announced program to boost the use of LPG in order to cut the ballooning subsidies for kerosene. In order to make the program successful, the government promises to provide LPG container at cheap prices for the public.

Ari said Pertamina would kick off the kerosene-to-LPG switch program in Jakarta in August and September this year. Pertamina will provide a 3-kilogram container for the sale to the public.

Pertamina now sells LPG at Rp 4,250 per kilogram. According to Ari, Pertamina has proposed to raise the price of the fuel to an ?economic level?, yet the government turned down the proposal.

?As a result, Pertamina will lose Rp 1.9 trillion this year from the sale of LPG,? Ari said. This will also make Pertamina unable to pay a dividend of Rp 15 trillion this year as targeted by the government. (Godang)