REPUBLIKA.CO.ID, JAKARTA -- The Indonesian Consumers Institute Foundation (YLKI) urged state-owned oil and gas company Pertamina to improve trade regulations on liquefied petroleum gas (LPG) following the government's move to raise the price of 12-kilogram cylinders.
"Pertamina should improve trade regulations on gas to prevent consumers from switching to using 3-kilogram canisters from 12-kilogram cylinders," a YLKI executive, Tulus Abadi, said here on Monday (5/1).
He added that to prevent this consumer migration, improving gas trade regulations was an urgent requirement.
It is almost certain that people will switch to using the 3-kilogram cylinders of gas because its price is lower than that of the 12-kilogram ones.
"The public will consider using the cheaper one. Therefore, trade regulations on gas must be improved so that cheaper gas is not off target and not be enjoyed by financially capable consumers," he said.
Abadi also suggested that the government guarantee the kind of supply chain used and the price of 12-kilogram gas canisters. "Pertamina should guarantee that distributors of 12-kilogram gas cylinders will use short distribution chains. A short distribution chain would ensure that its administration costs will not be high, whereas long distribution chains would lead to a hike in its price," he added.
Pertamina raised the price of 12-kilogram canisters of gas to Rp18,000 per cylinder, or some Rp1,500 per kilogram, beginning January 2. The cost was raised to its economic viability after Pertamina suffered losses for long.
With the increase, the price per 12-kilogram cylinder of gas in Jakarta and its vicinity rose from Rp120,000 to Rp140,000.
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