OREANDA-NEWS. September 26, 2014. PT Pertamina (Persero) decided to increase the price of non-subsidized 12 kg Elpiji following increased international LPG price and declining value of Rupiah which caused increased financial loss to the company. The price adjustment was decided to be Rp 1,500 pe kg (nett Pertamina) starting 00.00 (local time) on 10 September 2014.
 
This policy was taken after considering the government’s inputs in the coordination meeting at the Coordinating Economic Ministry’s office on 8 September 2014 so that Pertamina could adjust the price based on the Energy and Mineral Resources Ministry’s (ESDM) regulation No. 26/2009 on the distribution of liquefied petroleum gas.
 
This adjustment was part of the Roadmap of 12 kg Elpiji Gradual Price Adjustment which was based on the consultation meeting between the government and the State Supreme Agency (BPK) on 6 January 2014.
 
With this increase, the average selling price of 12 kg Elpiji from Pertamina became Rp 7,569 per kg from previously Rp 6,069 per kg. If added with other cost components, such as transportation, filing fee, agent margin and value added tax, the price at agents would be Rp 9,519 per kg or Rp 114,300 per tube from previously Rp 7,731 per kg or Rp 92,800 per tube.
 
If compared to LPG economic price, the current selling price was still far below its economic price. Based on the average CP Aramco y-o-y on June 2014 which reached US\\$891.78 per metric ton and the currency of Rp 11,453 per US\\$, plus other components as mentioned above, the economic price of 12 kg Elpiji should be Rp 15,110 per kg or Rp 181,400 per tube.
 
This adjustment was expected to decrease the loss in the 12 kg Elpiji business in 2014 by Rp 452 billion to only Rp 5.7 trillion from the prediction of Rp 6.1 trillion, assuming the consumption of 12 kg Elpiji reached 907,000 metric tons.
 
For that, Pertamina had also resubmitted the Roadmap of the 12 kg Elpiji Gradual Price Adjustment in the coordination meeting with the government, where the company believed that the adjustment could be done automatically every six months until it reached the economic price in 2016.
 
To ensure the smoothness of supply to customers, Pertamina had ensured the availability of LPG in the market both for 12 kg or 3 kg Elpiji. One of the ways to do that was by increasing LPG stock which was currently enough for 16 days. Pertamina also optimized the Elpiji distribution line through gas stations (SPBUs) and modern outlets.
 
Further, Pertamina also monitored the distribution of 3 kg Elpiji to bases through the application SIMOL3K (Monitoring System of Distribution of 3 kg Elpiji). In welcoming the price adjustment, Pertamina had also disseminated information to all stakeholders and LPG users.
 
Meanwhile, from the prediction of the total consumption of LPG, predicted to hit 6.11 million metric tons, only around 2.5 million metric tons could be provided by the domestic production, which all of them would be absorbed by Pertamina. Thus, around 59 percent LPG needs had to be imported.