JAKARTA (JP):Starting Sept. 1, state-owned oil and gas firm PT Pertamina will raise the price of liquefied petroleum gas (LPG) by 46 percent to Rp 6,200 (66 U.S. cents) per kilogram in an effort to help improve the performance of its LPG business division.
The price stands currently at Rp 4,250 a kg.
However, the price increase will only be applied to LPG sold in tanks with a weight of 50 kg, said Pertamina deputy director for marketing and trading Hanung Budya on Wednesday.
According to Hanung, the company suffers losses of up to Rp 2 trillion per year by placing the LPG price under the market price of Rp 7,200 per kg. Therefore, every year, the company has to allocate subsidies for LPG consumers so that people can afford the product.
"That's why the price rise will only be imposed on LPG sold in a 50kg-tank. The users of this category are those in the commercial sector, including hotels, restaurants and hospitals. The subsidy for them will be pushed down over time. (Ika Krismantari)
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