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Despite suffering losses on the sales of non-subsidized liquefied petroleum gas (LPG), state oil and gas company PT Pertamina said Friday that there would be no further LPG price increases this year.
The statement negates a previous plan to incrementally increase the price of non-subsidized LPG every month until it reached market value.
Pertamina recently increased the LPG price by Rp 100 per kg, raising the price of the 12-kg LPG from Rp 69,000 to Rp 70,200 per canister. The 12-kg canister LPG is the most commonly used by households for cooking.
Pertamina currently provides four types of LPG canisters: 3 kilogram, 6 kilogram - only available in Bali and East Java, 12 kilogram and 50 kilogram. The government only subsidizes the 3-kg LPG canister.
The price increase triggered a public outcry as it negatively affected households and home industries.
Pertamina president director Karen Agustiawan said the company remained committed to its plan to bring the LPG price up to the market level, but no further price increase would be carried out this year.
"If the LPG price goes down, we will cut our price. If the LPG price goes up, we will increase our price. The *proposed upward adjustment to market price* increase will not be implemented this year, but next year," Karen said.
Karen hinted that the postponement of price increases was in response to public objections.
"The increase has been overexposed. In fact, the increase was only Rp 1,200 per canister which is far cheaper than the pack of cigarettes that people consume in a day," Karen said.
This year the company expects to suffer Rp 2.3 trillion of losses *this year* from the non-subsidized LPG business. Prior to the price increase, Pertamina said losses from the sale of non-subsidized LPG had now reached Rp 3,200 per kilogram.
The marginal Rp 100 per kilogram increase would only cut losses by Rp 100 billion by the end of the year, the company said.
Pertamina expects demand for LPG to steadily increase and rise above 2 million metric tons this year as more households became more accustomed to using the fuel, which is replacing kerosene.
For nearly two years the government has been embarked on a program to shift household dependence for cooking from kerosene to LPG in order to cut the use of fuel oil and the cost of government subsidies.
The government said recently that since the kerosene to LPG program was launched in 2007, it had saved as much as Rp 9.22 trillion in expenditure on fuel subsidies.
The statement negates a previous plan to incrementally increase the price of non-subsidized LPG every month until it reached market value.
Pertamina recently increased the LPG price by Rp 100 per kg, raising the price of the 12-kg LPG from Rp 69,000 to Rp 70,200 per canister. The 12-kg canister LPG is the most commonly used by households for cooking.
Pertamina currently provides four types of LPG canisters: 3 kilogram, 6 kilogram - only available in Bali and East Java, 12 kilogram and 50 kilogram. The government only subsidizes the 3-kg LPG canister.
The price increase triggered a public outcry as it negatively affected households and home industries.
Pertamina president director Karen Agustiawan said the company remained committed to its plan to bring the LPG price up to the market level, but no further price increase would be carried out this year.
"If the LPG price goes down, we will cut our price. If the LPG price goes up, we will increase our price. The *proposed upward adjustment to market price* increase will not be implemented this year, but next year," Karen said.
Karen hinted that the postponement of price increases was in response to public objections.
"The increase has been overexposed. In fact, the increase was only Rp 1,200 per canister which is far cheaper than the pack of cigarettes that people consume in a day," Karen said.
This year the company expects to suffer Rp 2.3 trillion of losses *this year* from the non-subsidized LPG business. Prior to the price increase, Pertamina said losses from the sale of non-subsidized LPG had now reached Rp 3,200 per kilogram.
The marginal Rp 100 per kilogram increase would only cut losses by Rp 100 billion by the end of the year, the company said.
Pertamina expects demand for LPG to steadily increase and rise above 2 million metric tons this year as more households became more accustomed to using the fuel, which is replacing kerosene.
For nearly two years the government has been embarked on a program to shift household dependence for cooking from kerosene to LPG in order to cut the use of fuel oil and the cost of government subsidies.
The government said recently that since the kerosene to LPG program was launched in 2007, it had saved as much as Rp 9.22 trillion in expenditure on fuel subsidies.
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