The vast majority of people in Indonesia use kerosene for all their energy requirements. Kerosene or paraffin oil is a colourless flammable liquid usually used for fuel. Kerosene is made from petroleum, it is used mainly for cooking and lighting.

Kerosene is broadly used as a major subsidized fuel for household cooking (9.9 million KL, over 60% of 230 millions population, 4 billion USD / year). Government subsidies are used to reduce the cost of a fuel to encourage its use. These subsidies policy becomes counterproductive as they are expensive for the government and eating up significant portions of the national budget because the kerosene demand is obtaining increase and becomes highly subsidized, On 2008 the Kerosene subsidy estimated reach up to 7 Billion USD and tend to increase in the coming years.

The energy conversion is one of the Government efforts to reduce subsidized fuel consumption, The launching of energy conversion from kerosene to LPG has specifically commenced the government program to convert kerosene consumption to LPG for domestic use. By the conversion, budget for subsidized fuel is expected to reduce considering that subsidy for 1 kg LPG (of 1.7 liter kerosene energy equivalent) is lower than subsidy for kerosene. In three or four years ahead, 80% of kerosene consumption is expected to convert to LPG – current kerosene consumption reaches ± 10 million KL / year.

The Government's kerosene conversion program has been considered a success as more than 5.3 million households across the country stopped using kerosene this year, state oil and gas company Pertamina said, the program had saved the company Rp 5.32 trillion in fuel subsidies between 2007 and 2008. Pertamina has finished 'for low-income families' program and distributed more than 1.9 million units of gas stoves and LPG cylinders.

Up to now, the program has covered 13 provinces where 6.3 million kiloliters of subsidized kerosene has been withdrawn, while 1.9 million tons of LPG have been distributed. Pertamina managed to save on the conversion program worth Rp20 trillion, and after being deducted with conversion cost valued at Rp9.3 trillion, the net money saved on the program is Rp10.7 trillion.

Pertamina also received the most prestigious Government Award of Indonesia "Dharma Karya Energi Dan Sumber Daya Mineral Madya" for the achievement to the successfulness of the Kerosene to LPG Conversion Program. We finally found that the Pertamina's " Kerja Keras Adalah Energi Kita " takes place at the moment.

Kerosene to LPG Program Conclusion:

• LPG conversion program will dramatically change the energy landscape in Indonesia, which which LPG demand will reach 4.098.570 Mton / year in year 2010.
• By year 2010 Indonesia will import LPG a 1.782.130 Mton / year, while 2.316.440 Mton will be produced by domestic producers.
• Using LPG will save up to Rp. 100,000, – (US $ 11) per month for household consumers and create better life, faster, cleaner, and friendlier.