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Jakarta Post

Demand for subsidized LPG exceeds quota: Pertamina

  • News Desk

    The Jakarta Post

Jakarta   /   Thu, March 15, 2018   /   10:06 am
Demand for subsidized LPG exceeds quota: Pertamina Kebon Kelapa residents in Bogor, West Java, stand in a long line to buy subsidized liquefied petroleum gas (LPG) in 3-kilogram canisters on Dec. 5, 2017. (kompas.com/Ramdhan Triyadi Bempah)

State-owned energy company PT Pertamina has estimated that the demand for subsidized 3-kilogram liquefied petroleum gas (LPG) canisters will exceed the quota set by the government in the 2018 state budget.

Pertamina marketing director Muchamad Iskandar said in Jakarta on Tuesday that the subsidized LPG quota was set at 6.45 million metric tons this year, while the estimated demand would reach 6.7 million metric tons.

“Our estimation is based on the average growth of 3-kg LPG canister consumption, which increases by 4 to 5 percent every year,” Iskandar said during a hearing with House of Representatives’ Commission VI overseeing mining and energy, among other things.

He said the demand for 3-kg LPG canisters had been increasing over the last three years -- 5.5 million metric tons in 2017, 6.01 million metric tons in 2016 and 6.31 million metric tons in 2017.

The government only allocated 6.19 million metric tons of subsidized LPG in 2017.

“We have to anticipate the increasing demand for subsidized LPG, which will be higher than the quota,” said Iskandar

He added that Pertamina had pointed out the possible higher demand for subsidized LPG this year because it was the obligation of the government to provide low-income households with subsidized LPG.

However, the government previously said it would not allocate more funds to subsidized gasoline (Premium), Solar (diesel fuel) and 3-kg LPG canisters.

He said the government provided a subsidy of Rp 6,500 (46 US cents) for each 3-kg LPG canister. (roi/bbn)