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Jakarta Post

Govt estimates lower subsidy amid global decline in gas price

  • Stefanno Reinard Sulaiman

    The Jakarta Post

Jakarta   /   Thu, July 18 2019   /  02:50 am

The government expects to spend less on this year’s subsidy for 3-kilogram canisters of liquefied petroleum gas (LPG) amid the declining trend in the global gas price.Energy and Mineral Resources Minister Ignasius Jonan said on Monday during a House of Representatives hearing that the price of CP Aramco — the global benchmark for LPG — had fallen 40 percent since October 2018.“Last October, CP Aramco was US$655 per ton, but now it is $375 per ton, or down $280. This is half the price. At the recent Cabinet meeting, we were still undecided whether to make a price adjustment or not,” he said.Assuming that the gas price continued to hover around $375 until December, the ministry estimated it would spend Rp 44.16 trillion ($3.16 billion) on the subsidy for 3 kg LPG canisters, about half the Rp 75.22 trillion budgeted for this year.Government spending on the 3 kg LPG subsidy reached...