Little luck in replacing kerosene with LPG

The Jakarta Post ,  Jakarta   |  Tue, 07/31/2007 12:15 PM  |  Business

Urip Hudiono, The Jakarta Post, Jakarta

The government's program to gradually replace the public's use of highly subsidized kerosene with liquefied petroleum gas (LPG) appears to still be progressing slowly, with less than 5 percent of this year's target having been reached.

The program has as of the end of July only replaced 20,000 kiloliters of kerosene with 2,600 tons of LPG, an official from state oil and gas firm PT Pertamina said, from a target to replace a total 428,000 kiloliters of kerosene with 181,000 tons of LPG.

The government is however upbeat of meeting its target by the end of the year, as it continues to distribute a total of 6 million gas stoves and their LPG cylinders free to the public this year, and up to 40 million by 2009.

""We have so far distributed 430,454 gas stoves and cylinders to households, and 32,716 to small- and medium-sized industries,"" Pertamina marketing and trade director Ahmad Faisal said after a meeting Monday with Vice President Jusuf Kalla and Industry Minister Fahmi Idris on the progress of the kerosene-to-LPG conversion program.

The government will also address cases of defective gas stoves, which is considered as the only remaining problem hampering the program, after it resolved issued concerning the procurement of gas stoves and their LPG cylinders.

""There were between 7 to 11 percent of the gas stoves produced which were found to be defective and had to be rejected,"" the Industry Ministry's director general for metals and miscelanous industries, Anshari Bukhari, said.

""We will continue reminding suppliers to always meet the required product specifications and quality.""

Anshari mentioned that 11 firms had won the bidding for the procurement of the gas stoves for the program, with a total production capacity of 17 million stoves per year.

Another 11 companies, meanwhile, will supply 13 million LPG cylinders.

The government began the kerosene-to-LPG conversion program in December last year, with Pertamina distributing 25,000 three-and-a-half kilogram LPG cylinders to low-income households in Kemayoran, Central Jakarta.

The program is also supported by the State Ministry for Cooperatives and Small and Medium Enterprises.

The program will for this year initially target Greater Jakarta and West Java, expanding to the whole of Java and Bali by 2009.

It is expected to replace the burning of 5.2 million kiloliters of kerosene with 3.5 million tons of LPG within the three years, saving government fuel subsidies.

The fuel subsidy in this year's budget revision has been reduced to Rp 54.1 trillion (US$6 billion), from an initial Rp 61.8 trillion. Last year, the fuel subsidy was also less, at Rp 60.5 trillion from the original Rp 62.7 trillion estimate.

The implementation of the program in Depok, West Java has however been marred by fuel shortages, due to the lack of LPG distributed compared to kerosene, and public objection towards buying the more expensive LPG.

Pertamina, the only LPG distributor in the country, currently sells LPG at Rp 4,250 per liter, while the heavily subsidized kerosene is sold at Rp 2,000 per liter.

One kilogram of LPG is roughly equal in energy content to three liters of kerosene.

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