The Recurring Problem of 3 Kg LPG

Tracing the last ten years, scarcity and a series of other problems related to 3 kilogram (kg) LPG have always occurred.

The difficulty experienced by the community in obtaining 3 kg LPG in recent days is suspected to be a temporary side effect of the transition in the regulation of subsidized gas distribution. The question is, will the new regulation later solve this recurring problem?

According to regulations, the rules regarding 3 kg LPG are outlined in Presidential Regulation (Perpres) Number 104 of 2007 concerning the Provision, Distribution, and Pricing of 3 Kilogram Liquefied Petroleum Gas Cylinders.

In Article 2 of Presidential Regulation 104/2007, the provision and distribution of 3 kg LPG cylinders are only intended for households and micro-enterprises.

If we look at this part alone, it can be interpreted that the distribution system of 3 kg LPG cylinders is open, and can be purchased by anyone, from any group.

Actually, what is meant by "entitled" in Presidential Regulation 104/2007 refers to residents within the scope of households or micro-enterprises who do not have gas stoves (kerosene).

Therefore, in Article 3 of Presidential Regulation 104/2007, it is stipulated that the provision and distribution of 3 kg LPG cylinders begin with the free distribution of 3 kg gas cylinders along with gas stoves.

During its implementation in the field, this regulation has become biased and the middle and upper classes have also enjoyed the subsidy.

The phrase "For the Poor Only" attached by PT Pertamina (Persero) as an effort to target fuel subsidies accurately has in fact not been successful.

This is similar to the purchase of Pertalite type vehicle fuel which must use a QR code and still leaves room for misuse.

In 2019, the Regulation of the Minister of Energy and Mineral Resources No. 26/2009 concerning the Provision and Distribution of Liquefied Petroleum Gas was issued.

This regulation explicitly states that only household groups and micro businesses with an income or expenditure not exceeding Rp 1.5 million per month are entitled to use subsidized LPG. In practice, however, this provision is not enforced in the field.

The rules related to the use of subsidized LPG gas are also specifically issued through Presidential Regulation of the Republic of Indonesia Number 38 of 2019 concerning the Provision, Distribution, and Pricing of Liquefied Petroleum Gas for Fishing Vessels for Target Farmers.

Then in December 2023, the Ministry of Energy and Mineral Resources issued the Decree of the Minister of Energy and Mineral Resources No. 37.K/MG.01/MEM.M/2023 concerning Technical Instructions for the Distribution of Certain Liquefied Petroleum Gas Refills Right on Target and the Decree of the Director General of Oil and Gas No. 99.K/MG.05/DJM/2023 concerning the Stages of Regions and Time for Implementation of the Distribution of Certain Liquefied Petroleum Gas Refills Right on Target.

The contents of the regulation contain provisions that the purchase of 3 kg LPG Cylinders can only be done by certain registered LPG users. For 3 kg LPG Cylinder users who are not registered or want to check their user status, they must register or check their personal data at the official Sub Distributor/Base before making a transaction. These provisions apply as of January 2024.

In November 2024, several cases of gas adulteration were revealed in the Cengkareng, Bekasi, and Indramayu areas. The LPG distribution case then rolled into the issue of differences in retail prices set by the government according to each region and those sold at retail.

Most recently, as of February 1, 2025, purchases of 3 kg LPG can no longer be made at the retail level, but can only be made at official Pertamina bases.

Since it was introduced to the public in 2007, the selling price of 3 kg LPG or what is known as melon gas is IDR 4,750 per kilogram (kg).

In fact, the average price of non-subsidized LPG at that time was around Rp 10,000-11,000 per kg. The subsidy value for melon gas was around Rp 6,000 per kg. With annual consumption of 6-7 million tons, LPG subsidies could be more than Rp 36 trillion per year.

In 2018, the 3 kg LPG subsidy reached IDR 58.1 trillion and in 2019 it was not much different, which was IDR 58 trillion. At the end of last year, the Ministry of Finance (Kemenkeu) reported that the budget realization for the 3 kg LPG gas subsidy had reached IDR 80.9 trillion as of December 24, 2024.

In addition, the distribution quota for 3 kg LPG this year has exceeded the quota set in the 2024 State Budget. Meanwhile, the quota for 3 kg LPG in the 2024 State Budget is 8.03 million tons.

Meanwhile, the distribution of subsidized LPG has reached 103 percent of the quota. This figure does not include additional supplies of around 150-200 thousand metric tons for the New Year's allocation yesterday.

Back to the issue of subsidies on commodities, because there are two very different prices for one type of goods, it is not surprising that there is misappropriation in the field. For example, the mixing of LPG gas from a 3 kg cylinder to a non-subsidized 12 kg cylinder.

Not to mention the problem of hoarding 3 kg gas which causes scarcity and price increases, and people who are considered well-off also buy LPG which is actually for the poor.

In searching Kompas news archives, this collection of problems has never been absent every year in the last ten years.

In 2015, Pertamina admitted that it could not prevent consumers of 12 kg LPG from switching to 3 kg LPG due to the much cheaper price. Likewise, consumers who bought 3 kg LPG to resell.

If using the current reference, the price of refilling Bright Gas LPG 5.5 kg at minimarkets in Jabodetabek is approximately IDR 105,000 and Bright Gas LPG 12 kg is approximately IDR 218,000 per cylinder.

This figure is far different from the more affordable price of 3 kg LPG, even though it is above the HET in each region.

The closed distribution model with purchases using identity cards has not been able to run fully. This leniency is what makes LPG adulteration continue to occur. The threat of criminal penalties does not deter, the large profits obtained motivate adulteration perpetrators to continue their practices.

Starting February 1, 2025, the government through the Ministry of Energy and Mineral Resources has decided to prohibit retailers from selling 3 kg LPG so that subsidies are right on target. Retailers who still want to sell 3 kg LPG must be registered as official Pertamina bases or distributors.

Retailers who wish to become a base can register through the Online Single Submission (OSS) system to obtain a Business Identification Number (NIB).

In this new provision, recipients who are entitled to receive a 3 kg LPG subsidy do not experience any difference from the previous regulation.

Those who are entitled to receive it are households, micro-businesses, targeted farmers (who have received LPG starter packages for water pumps from the government), and targeted fishermen (who have received LPG starter packages for fishing vessels from the government).

On the one hand, PT Pertamina through the Corporate Secretary of PT Pertamina Patra Niaga, Heppy Wulansari, stated that this effort makes prices more stable and provides certainty of quality assurance and quality of LPG, including the weight of the cylinder that meets standards.

The government also continues to expand the coverage of bases so that it is easier for people to obtain subsidized LPG.

On the other hand, a number of economic observers stated that the implementation of this new regulation actually has a negative impact on the grassroots. In addition to the current scarcity of 3 kg LPG, retailers with small capital are threatened with their businesses going bankrupt.

Retailers will have difficulty obtaining depot status because they need large capital because they will be required to buy 3 kg LPG in large quantities, beyond their current capabilities.

Finally, on Monday (3/2/2025), the government through the Minister of Energy and Mineral Resources Bahlil Lahadalia said that the government has formulated the right distribution formula so that the poor can more easily access 3 kg LPG. One of them is by making retailers official bases if they can meet a number of the terms and conditions set.

Learning from the journey of 3 kg LPG subsidies in at least the last ten years, the problem always revolves around weak control and misappropriation of practices in the field.

At the grassroots level, energy commodities are also political commodities. The issue of rising prices and energy scarcity is a vulnerable issue that can lead to polemics and conflicts. (LITBANG KOMPAS)