REPUBLIKA.CO.ID, JAKARTA - Ministry of State Owned Enterprises as PT Pertamina shareholder decided to slash the increase of 12 kg LPG (liquid petroleum gas) price, from around 3,800 IDR per kilogram (kg) to 1,000 IDR per kg. This revision will be effective on Tuesday at 00:01 AM.

"Ministry of State Owned Enterprises as Pertamina shareholder decides that the earlier price increase was too high so we decided to cut the increase from 3,800 IDR to 1000 IDR per kilogram from its basic price," Minister of State Owned Enterprises, Dahlan Iskan said on Monday.

Earlier Indonesian Chamber of Commerce and Industry (Kadin Indonesia) also asked government to cancel the increase and find the main reason behind the decision. 

"It is important for public and business community to understand and accept the price hike," Vice Chairman of Kadin Indonesia in Jakarta, Sarman Simanjorang said.

The rising price of LPG will supress the growth of small and medium enterprises (SMEs). Simanjorang said that Pertamina's lose was not the adequate reason and rose a question mark. He asked Ministry of State Owned Enterprises to evaluate Pertamina decision.

With 3,800 IDR increase per kilogram, the price of non-subsidized LPG price of 12 kilogram capacity increased from 70,200 IDR to 117,708 IDR per cylinder, effective on January 1, 2014. The decision was based on the recommendation by Supreme Audit Agency (BPK) after finding that Pertamina suffered 7.73 trillion IDR losses in financial losses from the sale of non-subsidized LPG from 2011 to October 2012.

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