Indonesia: Government starts discussing ‘Premium’ fuel price formula

• Nov 23, 2018

The government has started its first meeting with state-owned energy holding company Pertamina to discuss a formula that will determine the price of Premium, Indonesia’s subsidized and cheapest type of gasoline.

Deputy Energy and Mineral Resources Minister Arcandra Tahar said the new formula to determine the price would consider the cost structure.

“Once the discussion in our ministry is completed, we will send a letter to the Finance Ministry,” Arcandra said in Jakarta on Thursday.

The price of Premium is a sensitive issue ahead of the April presidential and legislative elections. Last month, President Joko “Jokowi” Widodo canceled a price increase less than an hour after it was announced by Energy and Mineral Minister Ignasius Jonan.

Pertamina sold Premium gasoline at Rp 6,550 (45 US cents) per liter in Java, Madura and Bali, and Rp 6,450 per liter in other regions.

The government has told Pertamina to maintain the current price until 2019, even though the market price is higher at Rp 7,250 per liter.

The meeting was held amid a global oil price plunge this week. The price of global benchmark Brent crude dropped to $63.28 per barrel on Thursday due to concerns about rising global supplies and growing fears of an economic slowdown.

Previously, Energy and Mineral Resources Ministry oil and gas director general Djoko Siswanto said all fuel companies in the country, including Pertamina, would be summoned to discuss the issue. (bbn)

Pertamina would be summoned to discuss the issue. (bbn)

Source: http://www.thejakartapost.com/news/2018/11/23/government-starts-discussing-premium-fuel-price-formula.html