Pertamina Ups Price of 12-Kilo LPG Cylinders
State oil and gas company Pertamina will on Wednesday increase the selling price of its 12 kilogram-cylinders of liquefied petroleum gas (LPG) by 67.7 percent, or Rp 9,809 ($0.80), per kilogram.
Ali Mundakir, Pertamina's vice president for corporate communication, said that subsidies, along with the depreciation of the rupiah, caused the company to lose an estimated Rp 5.7 trillion in 2013.
Ali said that the usual price of Rp 5,850 per kilogram, a price set in October 2009, was far from the production cost of Rp 10,785 per kilogram.
Pertamina, he added, had cumulatively, already incurred a loss of Rp 22 trillion over the past six years.
"Because of that, starting on January 1, 2014, at 00:00, Pertamina is applying a new LPG price for 12-kg cylinders across the country," Ali said.
The hike brings the total price of a 12-kg LPG cylinder to Rp 117,708, compared to the previous Rp 70,200.
Consumption of LPG in 12-kilogram containers stood at 977,000 tons last year.
Ali said the decision comes as a follow up by a recommendation of the Supreme Audit Agency (BPK), and added that the Energy and Mineral Resources Ministry has been informed of the price increase.
"This condition is believed to not have too much of an impact on people's purchasing power, considering that the consumers of the 12-kg containers are the well-to-do," Ali said.
"For consumers with weaker economic capabilities, and for micro enterprises, the government provides the 3-kg cylinders with a subsidized, cheaper price," he added.
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