The Evaluation of Price Determination of LPG in Indonesia (Case Study at Pertamina Jakarta)
Abstract
Alawiyyah, Rosmah(2003). The Evaluation of Price
Determination of LPG in Indonesia.(Case Study at Pertamina Jakarta)
Yogyakarta: Accounting Department, International Program, Faculty of
Economics, Islamic University of Indonesia.
Pertamina as the state owned company until the establishment of UU No.
22 Th. 2001 was characterized as an organization, which is have protection and
privilege from the government. This condition was supported by the existence of
Chapter. 33 verse 2 and 3, in which oil and gas are considered as strategic
commodity that controls the life of many people. By this thought, government
finally decided that the right to manage and use such resources is a privilege of the
state. One of the products of Pertamina is Liquefied Petroleum Gas or LPG. Since
it was first launched in 1966, it has never been a profitable product for Pertamina.
For some reasons, the price of this product was set under the cost of production
even in its first launch. Things have been changed since the establishment of UU
No. 22 Th. 2001. By this law, Pertamina will have to compete fairly in oil and gas
market with the other competitors. This could only mean one thing, that Pertamina
should start to be a profit - oriented company.
This study is conducted to find out the clue behind the current issue of
increasing price of LPG in the market. There are many pros and cons in the
society about the policy of Pertamina in increasing the price of LPG. Each of
these stands has its own argument. By maintaining its objectivity, this study
describes the reality behind the phenomenon of LPG's price structure to find the
cause of price setting problem of LPG.
This study is conducted throughout a descriptive study of LPG's price
structure. Throughout direct observation in Pertamina, the researcher attempts to
analyze the financial data of Pertamina in order to find the cause of LPG's
problem. In general, the data analysis is conducted by doing a careful study of
LPG's price structure.
The result of this study is that Pertamina had made a mistake by setting a
cheap price for an expensive product. This was causing society to perceive LPG
as a cheap product, whereas in reality this product has never been cheap at all in
terms of production cost. In economic sense, increasing the price is reasonable to
cover the losses. Moreover LPG department start to get the profit in running their
business. By looking the price structure of LPG, it is rational to increasing the
price because the price structure shows that the basic production cost is high.
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