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Increase In LPG Prices Threatens Indonesian Bakeries

Fuel  in bakeries constitutes major part on costing of  the products . With daily surge on crude oil price in international market  governments  of many  countries  have no option   but to increase the prices of petrol , diesel  and  related products such as LPG ,CNG  etc .

Indonesia    is one such   example

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VIVAnews - Basic electricity tariff and 12-kg LPG's prices are expected to be revised in the near future.

Small-sized industries may be highly affected by the plan. Head of Indonesian Association of Bakery Producers (APEBI) Chris Hardijaya said even now before the prices are doubled, the said industries have been bothered by the high prices of 12-kg LPG.

"The industries require four 12-kg LPG tubes for production worth Rp 300,000 of prices. Should the price go up, the costs of LPG would be Rp 400,000," he said today, June 2.

On the other hand, he said further, bread selling prices cannot be multiplied sharply. As a result, small-sized industries will be closed and layoffs cannot be avoided. "It will be the worst effect of the plan," he said.

In addition, he said, industries and homes would target the cheapest LPG of three kilograms.

A spokesperson of the small-sized industry, Sium Muchji, said that sellers now find it difficult to find 12-kg LPG. "There's shortage in the market. We used to get 30 tubes of supply. But now we are only supplied 10 tubes," Siu said.

Although  Bakery Industry in Indonesia has been dominated by unbranded cottage industry .Few modern bakeries and retail have opened up in Indonesia . Among popular player in modern bakery industry are Holland Bakery, Dunkin Donuts, JCo, BreadTalk, Breadstory, Mama Oven, Breadboy  and   retail players such as Matahari .

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Solution to such a scenario would be selective subsidy   by government   to the bakeries  who  employ   number of workers in their bakeries .In a trade of between them on cheaper bread and  bakery products

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