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April 8, 2008

Govt told to control gas cylinder trade

The Indonesian Committee for Energy Control and Retrenchment (Kipper) has urged the government to immediately issue a regulation on the sale of 12 kg gas cylinders.

Under the regulation, the sales of 12 kg gas cylinders would only target households and small enterpreneurs, Kipper Secretary General Sofyan Zakaria said.

"The regulation is about the same as Presidential Regulation No 55/2005 governing the use of subsidized kerosene," he said.

The regulation would ban commercial gas users such as hotels, restaurants and cafes from using 12-kg gas cylinders. Instead, they would only be allowed to use 50-kg gas cylinders, he said.

"The 50-kg gas cylinders belong to the able group which does not deserve a subsidiy. Therefore, state oil and gas firm Pertamina's plan to provide a price discount or reduction to the users of 50-kg gas cylinders was not a good solution, he added.

At the present prices, Pertamina has suffered a loss of 450 billion rupiah ($49.05 million) to subsidise the users of 50-kg gas cylinders and a loss of 500 billion rupiah in subsidy to industries, he said.

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