Pertamina will likely announce increase in LPG price this month

State owned oil and gas company Pertamina will likely announce an increase in liquefied petroleum (LPG) prices both for households and industrial users this month, Bisnis Indonesia reported on Friday.

General Manager for Pertamina's domestic gas market Hanung Budia Yuktantya said in Jakarta on Thursday that Pertamina could no longer delay the planned increase in the LPG prices due to the widening of the company's financial deficit from the LPG sales.

Hanung, however, said that in order to reduce its social impact, the increase in the LPG price for households would not be as high as those for the industrial users.

Pertamina planned late last year to increase the price of LPG by 41 percent from Rp 4,200 per kilogram to Rp 6,000 per kg or from Rp 51,000 per container to Rp 72,000 per container. The price increase was however delayed.

Hanung said that the company would likely increase the LPG price for industrial users to Rp 7,000 per kg from about Rp 4,250 per kg at present.

Pertamina said that it needed to increase the price of its LPG to cope with the loss from its LPG sales. At present Pertamina suffers a loss of about Rp 2,500 from every kilogram of LPG it sells.

According to Pertamina, it could suffer a loss of at least Rp 2 trillion from the sales of LPG this year, if it continued to maintain the current prices. The company sells about 200,000 tons of LPG to industrial buyers a year. (*)