Jakarta – Price of subsidised fuel, including 3-kilogram LPG cylinders, and non-subsidised electricity tariffs will soon rise in response to the spike in world oil prices, officials said.
Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said in a written release, Friday (15/4) that the government would adjust the price of pertalite (90-octane level unsubsidised gasoline) and diesel fuel. He said that “the government is preparing a short, medium to long term strategy for a number of energy sectors,” and signalling that the increase in energy commodity prices would happen in the near future.
“The strategy to deal with the impact of rising world oil prices, for the medium term, will be adjustments to the price of Pertalite, diesel oil, and accelerating substitute fuels such as gas fuel (BBG), bioethanol, bio CNG, and others,” he said.
Tasrif said the surge in world oil prices also triggered an increase in the price of Indonesian crude oil (ICP) in March up to USD 98.4 per barrel, far above the state budget assumption, which only assumes USD 63 per barrel.
For the short-term strategy related to subsidised fuel, one of the government’s scenarios is to increase the quota for subsidised fuel such as diesel, kerosene, to special assignment fuels such as pertalite.
The quota for subsidised diesel is proposed to be increased by 2.29 million kilolitres (kl) to 17.39 million kl, kerosene to increase by 0.10 million kl to 0.58 million kl, and Pertalite to increase by 5.45 million kl to 28.50 million kl. Furthermore, Tasrif also revealed a plan to increase the price of 3-kg LPG as part of his strategy to deal with soaring world oil prices.
The ministry will also conduct efficiency in the basic costs of electricity supply and PLN’s primary energy strategy, as well as optimising power plants using domestic fuel sources (coal power and renewable power plants). Furthermore, for the medium and long term in the electricity sector, the strategies taken include matching and segregating beneficiary customer data based on the Integrated Social Welfare Data (DTKS) for direct subsidies.
Separately, the Indonesian Chamber of Commerce and Industry (Kadin) said in a written release that they hope the government will postpone plans to adjust or increase prices for the energy sector such as fuel, LPG and electricity up to three months after Eid.
Deputy Chairman of Kadin for Industry Bobby Gafur Umar said that understands the pressures on the state budget due to increase in world oil prices. He said, Indonesia is considered to have recorded good economic performance for the 2021 period. The trend at the beginning of the year is also considered to be getting better.
While people’s purchasing power is predicted to increase during the month of Ramadan and Eid. However, the increase in energy prices or tariffs is considered to have the potential to reduce people’s purchasing power.
“I think that in order to maintain the economic recovery at this early stage, the government must wisely hold back energy increases,” said Umar. (Hartatik)
