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SKK Migas asks Pertamina to offer fairer price to LPG investors
SKK Migas head Dwi Soetjipto said the domestic LPG industry has remained underdeveloped for years, unable to attract investors as they can only sell their output to Pertamina at a low price.
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SKK Migas chairman Dwi Soetjipto gestures on Aug. 28, 2024, during an interview at his office in Jakarta. (Reuters/Ajeng Dinar Ulfiana)
T
he Upstream Oil and Gas Regulatory Task Force (SKK Migas) wants state-owned oil and gas company Pertamina to offer fairer pricing to potential liquified petroleum gas (LPG) investors, as the country looks to boost local production of the gas.
SKK Migas head Dwi Soetjipto said the domestic LPG industry has remained underdeveloped for years, unable to attract investors as they can only sell their output to Pertamina at a low price.
“So why didn’t we develop them? First of all, the selling price to Pertamina is too low, so importers see this as uneconomical,” Dwi told reporters in Jakarta on Tuesday, saying that prices should not be too different from that of imported gas, referring to the Saudi Aramco Contract Price (CP).
Indonesia imported 6.9 million tonnes of LPG last year, equivalent to 79 percent out of the 8.7 million tonnes sold in the domestic market.
Read also: RI hopes new gas discoveries could add 1.2m tonnes to local LPG production
Indonesia is heavily reliant on LPG. Statistics Indonesia (BPS) recorded in 2021 that about 82 percent of households used LPG for cooking, while firewood and kerosene were used by 11 and 2 percent of households, respectively. Only 0.7 percent used electric stoves.
Indonesia aims to raise LPG output by about 1 million tonnes a year to reduce costly imports of the cooking fuel.
