Dahlan deepens crack in the Cabinet

JAKARTA. With less than 10 months remaining in President Susilo Bambang Yudhoyono’s second term, coordination among his Cabinet members has reached what may be an all-time low.

State oil and gas company PT Pertamina’s decision to reduce a hike in the price of 12-kilogram canisters of liquefied petroleum gas (LPG) following a public outcry has split the Cabinet.

After Yudhoyono came out in vehement opposition to the rise, Pertamina announced that it would scale back the price increase from Rp 112,200 to Rp 82,200 per canister.

State-Owned Enterprises Minister Dahlan Iskan, who has recently been currying support for a potential presidential run, said on Monday that he had always been a proponent of Pertamina raising the price.

Breaking from other ministers, Dahlan said he had begun pushing Pertamina to gradually increase the LPG price four years ago.

 “If we had annual small price hikes starting four years ago, we would already have an economical price today without much resistance,” he said.

 “However, every time a price increase was proposed during Pertamina shareholders meetings [which are attended by representatives from various ministries], it was never passed. There were always reasons for why it shouldn’t go up, such as ‘Idul Fitri is coming shortly’, or ‘it is a new year’.”

Dahlan made the comment during the Democratic Party’s presidential convention after he apologized on Sunday for withholding information about the planned LPG price increase.

Coordinating Economic Minister Hatta Rajasa has alleged Dahlan did not inform him and the President about the plan to raise the LPG price on Jan. 1, as was decided during Pertamina’s shareholders meeting on Dec. 30.

 “He [Dahlan] knew it, but he did not inform us. This has created confusion,” he said.

Dahlan, who previously denied any involvement in the decision, did not attend a meeting held by Vice President Boediono on Saturday to discuss the impact of the rise in the LPG price as he was busy with a publicity stunt, according to a Cabinet member.

Dahlan was in Yogyakarta on Friday and Saturday helping rice farmers eradicate mice that have caused harvests to fail.

Pertamina’s decision to sharply raise the LPG price was in response to the Rp 21.8 trillion it had lost selling the 12-kg LPG canisters below the market price since 2008.

The Supreme Audit Agency (BPK) had warned Pertamina that it had to prevent future losses in its LPG business or face prosecution.

Pertamina president director Karen Agustiawan said the company had to draw back the price hike after the government demanded it to.

 “We will also have to revise our profit growth target this year to only 5.65 percent from the initial target of 13.17 percent,” she added. The company said last month that its net profits were projected to reach US$3.44 billion this year, from last year’s estimate of $3.05 billion. (Bagus BT Saragih and Margareth S. Aritonang)