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Indonesia to Raise LPG Price for Industrial Users By 64 Pct

Posted on: Thursday, 26 January 2006, 09:00 CST

Indonesia to raise LPG price for industrial users by 64 pct

JAKARTA, Jan. 26 (Xinhua) -- Indonesia's state oil and gas firm PT Pertamina plans to increase the price of liquefied petroleum gas (LPG) for industrial users by some 64 percent in February, while maintaining the current price for household users.

Pertamina says the drastic hike is necessary to offset persistent losses in the business, The Jakarta Post newspaper reported Thursday.

The LPG price for industry will be increased to about 7,000 rupiah (74 U.S. cents) per kg, roughly equal to the global market price, from the current 4,250 rupiah per kg, the daily said, quoting the company's spokesman.

The price for household users will remain at 4,250 rupiah per kg, according to Pertamina's spokesman Mochamad Harun.

Pertamina says the new industrial price will allow it to narrow its losses from the LPG business, given that the price for LPG has reached 700 dollars per metric ton on the spot market.

Domestic LPG demand stands at 3,500 metric tons per day, of which household users account for 70 percent, with industry making up the rest.

Pertamina's refineries can only supply 2,700 metric tons per day. The firm buys LPG from refineries operated by the country's oil contractors and on the spot market.

Also in February, Pertamina plans to further slash fuel imports to 6.4 million barrels from the planned 7.6 million barrels amid abundant stocks and lower-than-expected domestic consumption.

Current fuel store are enough to meet demand for 27 days, said Harun.

Source: Xinhua News Agency - CEIS

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