Subsidized LPG Budget to Swell

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  • TEMPO.CO, Jakarta - Institute for Development of Economics and Finance (Indef) director Enny Sri Hartati said the price hike of Liquefied Petroleum Gas (LPG) will cause consumers to shift from buying 12-kg LPG to 3-kg LPG canisters. “This policy will cause trade off because the price difference is wide,” said Enny on Monday.

    Enny said the government should have increased the price of 3-kg LPG because it has never risen. However, the rise should be carried out gradually. “It’s useless if there’s a wide price difference between 3-kg LPG and 12-kg LPGs. It will only add more subsidy burden,” he said.

    The government has been optimistic that 12-kg consumers will not switch to 3-kg LPGs, but the number of middle-class people are is not that many. “All people use LPG. Those who have strong purchasing power will not switch, but the weak will switch to 3-kg LPGs,” he said.

    Coordinating Economic Minister Chairul Tanjung last week said he had accepted a request letter to increase 12-kg LPG price from PT Pertamina.

    “I’ve accepted it, but the price hike is the president’s authority,” he said on Thursday, adding that he must consult first to the president.

    AYU PRIMA SANDI