"We realize the government`s concern and will review the plan to raise the price of LPG in 12-kg cylinders at the right time," Pertamina Vice President for Corporate Communications Ali Mundakir said.
Jakarta (ANTARA News) - State oil and gas firm PT Pertamina has indefinitely postponed a plan to raise the price of non-subsidized liquefied petroleum gas (LPG) in 12-kg cylinders which has originally been scheduled for March.

"We realize the government`s concern and will review the plan to raise the price of LPG in 12-kg cylinders at the right time," Pertamina Vice President for Corporate Communications Ali Mundakir said here on Wednesday.

He said the company needs to increase the price of LPG to curb the business burden of the commodity which is projected to reach Rp5 trillion this year.

Earlier, Coordinating Minister for Economic Affairs Hatta Rajasa said now is not the right time to raise the price of LPG in 12-kg cylinders.

Pertamina has the authority to raise the price of non-subsidized LPG in 12-kg cylinders. However, the government must give its views to the plan, he said.

The company has proposed a 36.2 percent rise in the price of LPG in 12-kg cylinders effective in March 2013 to the government.

If approved, the price of LPG in 12-kg cylinders will increase by Rp2,116.7 to Rp7,966.7 from Rp5,850 a kg previously.

As such, the price of LPG in 12-kg cylinder from agents to consumers will increase by Rp25,400 to Rp95,600 from Rp70,200 earlier.

The price hike is expected to reduce the company`s losses from the sale of LPG in 12-kg cylinders by Rp1.1 trillion to Rp3.9 trillion.

Pertamina last raised the price of LPG in 12-kg cylinders by Rp100 to Rp5,850 from Rp5,750 a kg in October 2009.

However, the production cost of LPG continues to increase to up to Rp10,064 a kg now from Rp7,000 a kg in 2009.

With the production cost of LPG reaching Rp10,064 a kg and the selling price of LPG to agents standing at Rp4,912 a kg, Pertamina must spend Rp5,152 on every kilogram of LPG.(*)

Editor: Heru Purwanto
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