LPG prices will rise nonsubsidi

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LPG prices will rise nonsubsidi

Tuesday, 16 February 2010 08:16

JAKARTA: PT Pertamina (Persero) will raise the price of LPG nonsubsidi this year with a view to reducing losses from the company's LPG business which last year nonsubsidi reached Rp2, 6 trillion.
Marketing and Commercial Director Achmad Faisal said Pertamina currently Pertamina LPG nonsubsidi still far below the price keekonomiannya. Economics of LPG price has now reached Rp8.000 per kg, while the price of LPG nonsubsidi, such as packaging 12kg, only Rp5.850 per kg.
"It made a loss of Pertamina always nonsubsidi LPG business. But we aim to raise prices to achieve indirect economies. We are raising the price it is actually only to reduce corporate losses," he said yesterday.

However, Faisal could not explain how much the increase will be set. Pertamina, he said, also had to determine when the right time to raise the price.

"The value how, when we decided the time had not. But it is clear this year will be no price increases in stages."

Pertamina had planned last year's increase in LPG prices nonsubsidi Rp500 per kg for 3 months. However, because the rejection comes in the community, parliament, and also request review of the government, the increase was reduced to only Rp 100 per kg only.

"With the increase of only Rp 100 per kg it, last year we nonsubsidi LPG loss of approximately Rp2, 6 trillion, which mainly comes from packaging 12kg LPG," said Senior Vice President of Marketing and Commerce Pertamina Hanung Budya Yuktianta.

Hanung also said that a gradual price increase will not cause excessive inflation, as was the case in non-subsidized fuel sales to move up and down. "If you've used will not actually have an impact on inflation. Maybe four times the increase alone is boring."

Meanwhile, the Ministry of Energy and Mineral Resources said is still going to evaluate the possibility Pertamina raised the price of LPG is nonsubsidi because provisions concerning the livelihoods of the people and not merely economics issues.

Wait proposal

Director General of Oil and Gas Ministry of Energy and Mineral Resources Evita Herawati Legowo, said until now the government has not got a proposal requests an increase in LPG prices nonsubsidi from Pertamina.

According to him, though not competent to decide on the price determination, the government still had to get a report on the plan because under existing regulations the government must provide a recommendation.

"As long as Pertamina has not sent the letter, we were quiet. If they add a letter, we will evaluate thoroughly before remove the recommendation," he said.

Evita explained as happened last year, when the government recommended the cancellation of the scheme gradually increase nonsubsidi LPG, the government decided that the recommendations do not simply look at the issue price of economics.

The government, he said, should consider the impact if the increase is done because it was related to the livelihoods of the people.

"Plan of Pertamina may increase because they refer to the problem of economies of LPG. If the government does not just economics but also matters related to the livelihoods of people," he explained.

On the other hand, Pertamina asked the parties involved in the procurement of 3 kg LPG cylinders consisting of Hiswana Oil, banking, and tube manufacturers do not use subcontractors factory 3 kg LPG cylinders are not licensed to avoid an accident due to a lower specification.

Director of Marketing and Commerce Pertamina Achmad Faisal said the company often received allegations from the public and the parliament are also related accidents happened due to widespread leaks 3kg LPG cylinders.

In fact, the provision of LPG cylinders are in control of the Ministry of Industry, especially in terms of providing certification of the company and also to the product specifications.

"Apparently, in practice many of the actual tube manufacturers have qualified and certified by the Ministry of Industry, when subkontraktorkan get their orders to other factories that are not certified."