Indonesian ministers respond to gas hike

Indonesian ministers respond to gas hike
Vice President Boediono.

Three days after state-run oil and gas firm PT Pertamina increased the price of 12-kilogram (kg) liquefied petroleum gas (LPG), government figures responded to public concerns by meeting to discuss the sensitive issue on Saturday.

The meeting, led by Vice President Boediono, did not bring any clear result as Boediono would first report to President Susilo Bambang Yudhoyono, who was on a two-day visit to East Java.

The President is scheduled to lead another meeting on the issue on Sunday as soon as he returns.

"[In the meeting] we heard reports from the field, views from the public, as well as input from ministers. We will report to the President tomorrow [Sunday]," Boediono told a press conference after the meeting. "Today, we will not convey the situation [to the public]."

Yudhoyono called Boediono to discuss the gas price hike with Pertamina president director Karen Agustiawan and Cabinet ministers after hearing public opinion and reports of LPG prices that were higher than the price set by Pertamina.

Presidential spokesman Julian Aldrin Pasha said Yudhoyono was aware of the public's concerns and had asked the Vice President to lead a meeting on the issue.

Aside from Pertamina's Karen, Saturday's meeting was also attended by Coordinating Economic Minister Hatta Rajasa, Energy and Mineral Resources Minister Jero Wacik and Finance Minister Chatib Basri.

After the meeting, Hatta said the result would be "good for consumers", triggering speculation of a price correction to a level within the range of general domestic users.

Hatta added the government should protect the public, particularly the poor, following the LPG price hike, saying social protection funds should be managed well.

Asked whether Pertamina would bow to public concern by lowering the gas price, Pertamina spokesman Ali Mundakir said the decision would be made after the Sunday meeting.

"We don't want to assume what measures will be taken. We're just waiting for the final decision tomorrow," Ali told The Jakarta Post over the phone.

Pertamina increased the price of 12-kilogram LPG by 68 per cent, or from Rp 70,200 to Rp 117,708 per canister, on Wednesday, the first day of the year.

Although Pertamina has set the price, fixed consumer prices in the market vary depending on the proximity between LPG stations and supply points in each area.

Pertamina claimed the price-hike policy needed to be taken because the company had suffered annual losses amounting to Rp 6 trillion from the 12-kilogram LPG canister business.

Commenting on Pertamina's reasoning, legislator Dewi Aryani of the House of Representatives' Commission VII overseeing energy asked Pertamina to be transparent in its business and finance reports.

"Pertamina must explain to the public if the losses came from the company or simply from one of its business units," she said as quoted by Antara news agency.

Meanwhile, others shared their views on the hike.

Mariawaty Muhtar, a retired official, was disappointed with Pertamina's decision. "I live on a pension. I can't afford to buy the 12-kg LPG with the new price tag," she said.

"I saw a minister saying on TV that the government could not do anything about it and that it was Pertamina's authority to jack up the price. It's like the government just washes its hands of the matter. Who's going to defend us, the people?" she added.

Angelina Tan Gwan Nio has no plan yet to increase the price of her homemade food following the hike. However, if it turns out that other food vendors decide to up their prices, she said she would follow suit.

"The new price is shocking. It will have a wide effect on my business and other people. I just hope that households will still be able to afford LPG because it's one of our main needs," she said.

In addition, Boediono said the meeting discussed the policy in detail, including efforts to anticipate supply and distribution.

"We will ensure supply to prevent shortages across the country," he added.

Linda Yulisman and Tassia Sipahutar contributed to this report.

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