House: Subsidized LPG Distribution Must be Fixed

Kartika L Makmur, Robert Sidauruk

The House of Representatives (House) has criticized PT Pertamina’s procedures for overseeing the retail distribution system for subsidized liquefied petroleum gas (LPG). The House is of the view that the current system cannot resolve current shortages in the supply of subsidized LPG, particularly 3-kg LPG.
 
“The distribution management of 3 kg LPG is poor. Complaints on distribution, price, and misuse have continued to increase throughout this year,” said Rofi Munawar, lawmaker from Commission VII at the House, during a press conference on Monday.
 
Mr. Munawar noted that there has been an increase in the consumption of 3-kg LPG’s triggered by the price hike of 12 kg non-subsidized LPG. The increased demand for 3-kg LPG has lead to a shortage in the market.
 
Responding to the House’s statement, Giri Santoso, General Manager for Operational Region V at Pertamina, said that Pertamina has taken anticipatory measures by preparing additional stocks of LPG, especially for the upcoming fasting month of Ramadhan. Mr. Santoso assured that these measures will ensure the continued safe supply of LPG in East Java, Bali, NTB, and NTT.
 
For West Java, Jakarta, and Banten, Mr. Santoso informed that Pertamina will add 2.95 million canisters to the LPG stock, scheduled for delivery in the second week of June.
 
“This action is taken to ensure the public can easily get 3-kg LPG,” added Mr. Santoso.
 
Mr. Santoso also confirmed that there need not be any concerns that Pertamina cannot provide the necessary supply of 3-kg LPG for the market, as the predicted supply requirements only constitute 46 percent of the quota determined by the Government.
 
Increased Prices of Subsidized LPG
Sofyano Zakaria, an energy policy analyst, suggested the Government increase the price of subsidized LPG in an effort to address the ongoing issues related to 3-kg LPG. This action, according to him, will gradually reduce public dependence on subsidies.
 
According to Mr. Zakaria, if the Government increases the price of 3-kg LPG by IDR 1,000, this will help the Government reduce the subsidy on 5 million metric ton of gas and save the State budget approximately IDR 5 trillion per year.
 
“This figure is significant for the State,” added Mr. Zakaria.
 
Meanwhile, regarding the misuse of 3-kg subsidized LPG, Mr. Zakaria urged the Government and the House to firmly determine the annual quota of 3-kg LPG. Further, he emphasized it is important to clearly determine the groups of people who are entitled to subsidized LPG. These matters, Mr. Zakaria added, must be expressly stated in a government regulation.
 
“The resolve of the Government is required to determine the groups of people who are entitled to subsidized LPG. Moreover, this must also be followed with clear sanctions for any violations,” concluded Mr. Zakaria.
 
(hot/kc)
Kartika L Makmur, Robert Sidauruk

The House of Representatives (House) has criticized PT Pertamina’s procedures for overseeing the retail distribution system for subsidized liquefied petroleum gas (LPG). The House is of the view that the current system cannot resolve current shortages in the supply of subsidized LPG, particularly 3-kg LPG.
 
“The distribution management of 3 kg LPG is poor. Complaints on distribution, price, and misuse have continued to increase throughout this year,” said Rofi Munawar, lawmaker from Commission VII at the House, during a press conference on Monday.
 
Mr. Munawar noted that there has been an increase in the consumption of 3-kg LPG’s triggered by the price hike of 12 kg non-subsidized LPG. The increased demand for 3-kg LPG has lead to a shortage in the market.
 
Responding to the House’s statement, Giri Santoso, General Manager for Operational Region V at Pertamina, said that Pertamina has taken anticipatory measures by preparing additional stocks of LPG, especially for the upcoming fasting month of Ramadhan. Mr. Santoso assured that these measures will ensure the continued safe supply of LPG in East Java, Bali, NTB, and NTT.
 
For West Java, Jakarta, and Banten, Mr. Santoso informed that Pertamina will add 2.95 million canisters to the LPG stock, scheduled for delivery in the second week of June.
 
“This action is taken to ensure the public can easily get 3-kg LPG,” added Mr. Santoso.
 
Mr. Santoso also confirmed that there need not be any concerns that Pertamina cannot provide the necessary supply of 3-kg LPG for the market, as the predicted supply requirements only constitute 46 percent of the quota determined by the Government.
 
Increased Prices of Subsidized LPG
Sofyano Zakaria, an energy policy analyst, suggested the Government increase the price of subsidized LPG in an effort to address the ongoing issues related to 3-kg LPG. This action, according to him, will gradually reduce public dependence on subsidies.
 
According to Mr. Zakaria, if the Government increases the price of 3-kg LPG by IDR 1,000, this will help the Government reduce the subsidy on 5 million metric ton of gas and save the State budget approximately IDR 5 trillion per year.
 
“This figure is significant for the State,” added Mr. Zakaria.
 
Meanwhile, regarding the misuse of 3-kg subsidized LPG, Mr. Zakaria urged the Government and the House to firmly determine the annual quota of 3-kg LPG. Further, he emphasized it is important to clearly determine the groups of people who are entitled to subsidized LPG. These matters, Mr. Zakaria added, must be expressly stated in a government regulation.
 
“The resolve of the Government is required to determine the groups of people who are entitled to subsidized LPG. Moreover, this must also be followed with clear sanctions for any violations,” concluded Mr. Zakaria.
 
(hot/kc)
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