Indef Claims LPG Price Increase will not Affect Inflation

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  • TEMPO.CO, Jakarta - Enny Sri Hartati, Director of The Institute for Development of Economics and Finance (Indef), said that the plan to raise the price of 12 kilogram (non-subsidized) LPG has not affected inflation rates significantly. This is mainly because non-subsidized LPG is not considered as one of the primary need by consumers.

    "Compared to fuel, the multiplier effect of the price rise of LPG is not significant," said Enny earlier today. "The main point is that the price increase of the non-subsidized LPG will not affect the people's purchasing power because small-income households will switch to the subsidized three kilogram LPG."

    Coordinating Minister of Economic Affairs Chairul Tanjung, said that he has received a proposal letter from state-owned oil and gas company Pertamina to raise the price of non-subsidized LPG. "I have received the letter, but the authority to increase the price rests on the President," he said.

    Pertamina spokesman Ali Mundakir, said that the proposal to increase the price of non-subsidized LPG is in accordance with the government’s economic roadmap that was announced on January 15, 2014.