YLKI chief says make LPG better before hiking price

The Jakarta Post , Jakarta | Tue, 04/11/2006 9:52 AM | Business

The Jakarta Post, Jakarta

The Indonesian Consumers Foundation (YLKI) has told state oil and company Pertamina to improve the quality of its liquefied petroleum gas before realizing plans to increase prices.

YLKI's chief Indah Suksmaningsih said Monday the quality of LPG sold by Pertamina remained questionable given the lack of control over its processing.

""The new prices are based on the international standard prices, but it (Pertamina) provides the products with local quality,"" Indah told The Jakarta Post.

She noted that the National Standardization Agency, which has the authorization to standardize local products by international quality benchmarks, had yet to issue certification of the firm's LPG products.

""In addition to the quality, we also question if the content of LPG tubes, which come in different weights, matches the stated measurement.""

Indah also said the seal on the tubes did not meet required safety standards. ""This condition should be changed before Pertamina increases the LPG prices,"" she added.

Pertamina announced early this week that it would increase the prices of LPG in May to cope with growing losses from its sales.

According to the plan, LPG for households, currently Rp 4,250 (47 U.S. cents) per kg, will be increased 11.7 percent to 23.5 percent to between Rp 4,750 and Rp 5,250. For industry, the current price of Rp 4,250 price will rise 28.82 percent to Rp 5,475.

Pertamina's commerce and marketing director A. Faisal said Friday the increase was needed to meet higher international oil prices.

Pertamina's domestic gas general manager Hanung Budya said the increase would help the company, which imports part of its LPG, reduce losses from LPG sales this year to Rp 1.2 trillion from the initial estimate of Rp 1.88 trillion.

He said current retail prices of LPG were based on international prices of about US$323 per metric ton, while now they have gone up to US$508 per metric ton, or about Rp 6,900 per kg.

Indah said the problem was that consumers had no option but to buy the product from Pertamina, which holds exclusive rights to LPG sales here.

She urged the government to allow more companies to offer LPG products to provide consumers with a choice.

""At present, Pertamina, with its monopolistic right, is like a hunter in the zoo. He is ready to shoot us, like the caged animals, whenever he likes,"" Indah said. (09)

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