Non-subsidized Gas Prices Rise and Threat of Melon Gas Scarcity

Lutfi

Increase in Non-Subsidized Gas Prices and Threat of Melon Gas Scarcity
Increase in Non-Subsidized Gas Prices and Threat of Melon Gas Scarcity

Rancakmedia.com – The price of non-subsidized gas has increased, non-subsidized liquefied petroleum gas (LPG) has increased as of February 27 2022. PT Pertamina Patra Niaga Corporate Secretary Irto Ginting said that Aramco's Contract Price (CPA) price was recorded at 775 US dollars/metric ton.

In his official announcement, he revealed that the average CPA price would increase by 21% in 2021. Despite the increase, Irto personally confirmed that the 3 kilogram LPG subsidized by the government would not experience a price adjustment.

The price of 3 kg LPG still refers to the Maximum Retail Price (HET) set by the regional government. However, the increase in the price of non-subsidized LPG forced many people to switch to 3 kilogram LPG.

Bonifacius, owner of a grocery store in the Duren Sawit area, East Jakarta, said that many clients have switched to 3 kilogram LPG. The same thing was experienced by Ehma, a home customer in the Cilegon area who started switching to 3kg LPG.

Economic Observer's View

On Thursday, January 23 2020, officers from the Pancoran Mas gas agent in Depok, West Java, recorded a three kilogram LPG gas cylinder. The government is trying to limit distribution and adjust the price of 3 kilogram LPG.

Bhima Yudhistira, Economist and Director of the Center for Economic and Legal Studies (Celios), estimates that when the price of non-subsidized LPG rises, more people will switch to 3 kg LPG.

This is related to the large number of middle classes whose income has not yet recovered due to the outbreak, while the price disparity between subsidized and non-subsidized gas is widening.

Solution to Rising Non-Subsidized Gas Prices

The migration will likely cause a shortage of melon gas on the market. Bima emphasized that there are only two alternatives that the government can take ahead of this exodus.

First of all, there should be no increase in LPG prices in the future. “So the adjustment is enough, don't mess with it any more. "Because the impact of melon LPG will shift if non-subsidized LPG is changed again," said Bima.

Furthermore, Bhima added, the government could use compensation money to avoid increasing the cost of non-subsidized LPG.

Second, the government must increase the amount of money it spends on energy production subsidies. According to Bima, all energy subsidies in the 2022 State Revenue and Expenditure Budget (APBN) amount to IDR 134 trillion.

For him, increasing subsidies to IDR 180-200 trillion is the ultimate goal of his plan. This is because the increase in gas and crude oil prices is expected to have a long-term impact on the world.

Closed Subsidies May Not Be Applied

Meanwhile, according to Bhima, it is not appropriate to implement closed subsidies in an effort to prevent the current shortage of melon gas.

In contrast to open subsidies which allow anyone to buy, closed subsidies only allow people with certain criteria. Many people will be harmed by this. The reason is, gas melon buyers are not only the poor, but also SMEs.

According to Bhima, the supply of gas melons is running low, so people who meet the requirements may not be able to get them.

“Don't switch too quickly from open to closed subsidies, the momentum is not right. "LPG prices should have been reduced from yesterday," he continued.

Conclusion

Aramco's Contract Price (CPA) was recorded at 775 US dollars/metric ton. The average CPA price will increase by 21% in 2021. The price of 3 kg LPG still refers to the Maximum Retail Price (HET) set by the regional government.

However, the increase in the price of non-subsidized LPG forced many people to switch to 3 kilogram LPG. The migration will likely cause a shortage of melon gas on the market.

Bima emphasized that there are only two alternatives that the government can take ahead of this exodus. First of all, there should be no increase in LPG prices in the future. Second, the government must increase the amount of money it spends on energy production subsidies.

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Lutfi

Hi, let me introduce myself, Lutfi Hulasoh, I am a writer and techno blogger. I started creating a personal blog writing informative articles about the latest trends and developments in technology. My writing covers a wide range of topics, from mobile applications to artificial intelligence, and I can also provide easy-to-understand explanations to help readers understand complex concepts.