We will raise the price of LPG in the 50-kg canisters early in July at the latest
Jakarta (ANTARA News) - State-owned oil and gas firm PT Pertamina will raise the price of 50-kg cylinder gas by 10 percent in early July 2011 at the latest, a spokesman said.

Pertamina spokesman Aaron M said here on Thursday his firm had obtained approval from the Ministry of State Owned Enterprises (SOE) regarding its plan to raise the price of liquefied petroleum gas (LPG), particularly in the 50-kg cylinders.

"We will raise the price of LPG in the 50-kg canisters early in July at the latest," he said.

According to him, the ministry of energy and mineral resources (ESDM) has not yet approved the plan to increase the price because it was still constrained by a technical problem.

With the plan to raise the price, Pertamina, he added, was sure it would not cause many consumers to switch to the 12-kg cylinder gas, much less to the 3-kg canister gas.

"This is because the 50-kg cylinder gas and the 12-kg one have different segments of consumers. They also have big price disparities, not to mention the 3-kg canister gas," he said.

Aaron said Ministry of Energy and Mineral Resources` concerns were more on the price increase plan for the 12-kg gas.

"Pertamina is also still studying the plan to raise the price the 12 kg gas," he said.

The Ministry of Energy and Mineral Resources has not yet until Monday approved the price increase for the 50-kg gas as proposed by Pertamina.

Director General for Oil and Gas of the Ministry of Energy and Mineral Resources Evita Legowo said the government was still considering all aspects and impacts on the increase in the LPG prices.

Pertamina previously proposed an LPG price hike for non-subsidized LPG both for the 50-kg and 12-kg types in an effort to reduce losses.

The SOE was offering two options to overcome losses in the non-subsidized LPG business, namely to increase non-subsidized LPG prices

Pertamina proposed a 10 percent price increase for the 50-kg gas type by the end of June 2011 and thereafter an increase the price of the 12-kg type would follow.

The second option is that Pertamina asked the government to provide a subsidy for both types of gas.

(ANT.A014)

Editor: Ade P Marboen
Copyright © ANTARA 2011