President warns Pertamina, ministry on poor communication

President Susilo Bambang Yudhoyono blames poor communication between the state oil and company PT Pertamina and the Ministry of Energy and Mineral Resources for LPG price increases.

"I have warned both Pertamina and ministry officials about their poor communication that has led to such confusion," the President said at the State Palace on Wednesday.

Last Monday, Pertamina raised the LPG price for the 12- kilogram tank by 9.5 percent to Rp 5,750 (US$0.60) per kilogram. The company further stated that it would raise the price by Rp 500 every month until it reached Rp 11,400 per kilogram in order to reduce government subsidies and increase profitability.

The price increase forced many users of the 12 kilogram-tanks to shift to the smaller three-kilogram tank, which had a cheaper LPG price of Rp 4,240 per kilogram and was intended for the consumption of the poor. As a result, the smaller tanks have become scarce or available at an increased price.

The President has requested Pertamina make all necessary considerations, not only the economic reasons, before making a decision.

On the very same day, State Minister for Enterprises Sofyan Djalil announced that there will be no LPG price increases until the presidential and general elections in 2009.(and)