Pertamina to Increase LPG Price in Three Stages

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  • TEMPO.CO, Jakarta - State-owned oil and gas company Pertamina will continue to increase the price of the 12 kilogram (non-subsidized) LPG until 2016. The company explained that the reason behind the increase was aimed to reduce losses from selling the LPG below the standard economic price.

    "In accordance with the roadmap we have proposed to the government, the increase will be done on January 1 and July 1, in 2015, then on January 1, 2016," said Hanung Budya, Director of Marketing and Sales for Pertamina yesterday. The increase will be set to Rp 1.500 per kilogram.

    However, Hanung continued, every time Pertamina planned to raise LPG price, the company is required to report to the government. "LPG users are the general public, which can affect inflation rate, that is why we need to consult with the government first," he said.

    Annual domestic consumption of LPG had reached 900 tons. The increase is expected to help in suppressing the company’s losses by US$ 114 million. Hopefully, the three phase price increase will help LPG to reach its economic price.