Jakarta, Indonesia Sentinel — The Indonesian Business Competition Supervisory Commission (KPPU) has officially launched a preliminary investigation into alleged monopoly practices in the sale of non-subsidized Liquefied Petroleum Gas (LPG) in the midstream market by PT Pertamina Patra Niaga (PT PPN).
KPPU agreed to investigate the case involving this state-owned enterprise (BUMN) during a commission meeting on March 5, 2025.
“KPPU has taken the initiative to start a preliminary investigation into suspected monopoly practices,” said KPPU Deputy for Research and Advocacy, Taufik Ariyanto, in a written statement on Sunday, March 9, 2025, as reported by Tempo.
The preliminary investigation, based on KPPU’s research, will focus on gathering evidence related to alleged violations of Article 17 of Law No. 5 of 1999 regarding the Prohibition of Monopolistic Practices and Unfair Business Competition.
Alleged LPG Monopoly
Since last year, KPPU has been conducting an analysis of non-subsidized LPG sales in Indonesia. The commission suspects that a business entity is monopolizing the sale of non-subsidized LPG in the midstream market, specifically in the non-PSO (Public Service Obligation) bulk LPG segment for repackaging.
Taufik stated that the alleged monopoly includes price manipulation. “By selling at high prices and enjoying supernormal profits,” he said.
KPPU believes that the high prices of non-subsidized LPG have driven many consumers to switch to subsidized LPG or the 3-kilogram packaged variant. In its study, the commission has been examining the pricing structure of the sector, particularly from upstream to downstream.
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Currently, the sale of subsidized LPG under the Public Service Obligation (PSO) program is managed by PT Pertamina Patra Niaga. The state-owned company controls more than 80 percent of domestic and imported LPG supplies.
PT Pertamina Patra Niaga also sells non-subsidized LPG under the BrightGas brand. Additionally, it supplies bulk LPG to other companies, including BlueGas and PrimeGas, which manufacture non-subsidized LPG cylinders.
Unfair Profit
In 2024, KPPU found that the sale of non-subsidized LPG yielded extraordinarily high profits, around ten times the profit margin of subsidized LPG sales amounting to approximately Rp1.5 trillion ($95 million).
“KPPU suspects exclusive and exploitative behavior by PT Pertamina Patra Niaga through the sale of LPG at higher prices to downstream consumers, who are also its direct competitors in the non-subsidized LPG market,” Taufik said.
KPPU contends that PT Pertamina Patra Niaga’s non-subsidized LPG sales potentially violate Article 17 of Law No. 5 of 1999 regarding monopoly. These alleged violations has lead to the significant rise of non-subsidized LPG prices, discouraging consumers from purchasing it and instead opting for subsidized LPG.
This situation places additional strain on the state budget, increases the risk of misdirected LPG subsidies, and exacerbates Indonesia’s reliance on LPG imports, Taufik explained.
(Raidi/Agung)
