Pertamina to raise non-subsidized LPG price

State oil and gas company PT Pertamina will raise the price of non-subsidized Liquefied Petroleum Gas (LPG) to reduce financial losses suffered by the company from its LPG sales which last year reached Rp 2.6 trillion (1US$ = Rp 9,300).

Pertamina?s director for commerce and marketing Achmad Faisal said the price increase was needed because the current price of non-subsidized LPG was still far below the production costs.

He said that the LPG in 12-kg cylinder, which was sold at Rp 5,850 per kg, still far lower than its economic (market) price which reached Rp 8,000 per kg.

?We plan to increase the price in order to reduce the losses from the LPG business, not to make a profit,? he said. But, he was reluctant to unveil the percentage of the price increase and when the price increase would be announced.

?We don?t know when the price will be increased, but for sure there will be a gradual increase this year,? he added.

Pertamina planned to increase the price of the non-subsidized LPG by Rp 500 per kg for every three months last year. But the price increase plan was cancelled due to opposition from the public and House of Representatives members.

The company later raised the price by only Rp 100 per kg during 2009. As the result, the company suffered losses of up to Rp 2.6 trillion during the year from the sales of the non-subsidized LPG. (godang)