Pertamina to raise LPG price by 17.6% in July

State oil and gas firm PT Pertamina will increase the price of liquefied petroleum gas (LPG) sold in 12-kg cylinder in July 2008, following the rise in production costs and crude prices in the world market.

Pertamina?s president Ari H. Soemarno said in Jakarta on Friday that Pertamina had the right to increase the price of 12-kg cylinder LPG because the government only regulated the price of the 3-kg cylinder LPG which is sold under a subsidy program.

Pertamina will rise the price of the fuel, which is mostly used in househoulds, by about 17.6 percent to Rp 5,000 per kg (1US$=9,250) from Rp 4,250 per kg.

?Pertamina needs to increase the LPG price to adjust to the rising operating costs, especially those for transportation,? he said.

The company?s Marketing and Commerce Director Ahmad Faisal said with the rise in the production costs and prices of crude oil which at present reached US$140 per barrel, the LPG should be ideally sold at Rp 9,000 per kg. (Bernard)