Pertamina to increase LPG price this month
Friday, January 2 2015 - 01:40 AM WIB
State-owned oil and gas company PT Pertamina plans to increase the price of LPG in 12-kg canister by Rp 1,500 per kg this month to reduce losses from the distribution of the fuel.
?(It will be increased) in January. At current price, we continue to suffer losses,? said Pertamina Marketing Director Ahmad Bambang on Thursday. He did not disclose the specific date for the price increase.
The price of the 12-kg LPG is currently set at Rp 9,519 per kg or Rp 114,300 per canister.
Increasing the price of 12-kg LPG canister to its actual economic value is part of Pertamina?s long-term strategy to boost its downstream businesses. Considering the public?s purchasing power, Pertamina is currently selling the canister far lower than its economical price, although it gets no subsidy from the government.
In the last five years, Pertamina suffered Rp 17 trillion (US$1.4 billion) in total losses from sales of the canisters.
Therefore, the company is planning to increase the canister?s price every six months to finally reach its actual value in 2016. In 2014, Pertamina twice increased the price, in January and again in September.
Given the current weakening gas reference price, Pertamina hopes to only increase the canister price once more for it to reach the actual economic value.
Editing by Reiner Simanjuntak