Indonesia: New fuel distribution policy to maintain low inflation: Official

Deputy Energy and Mineral Resources Minister Arcandra Tahar has said the government’s wish to maintain low inflation is behind the plan to revise regulations related to fuel distribution and retail prices.

“It is because we want to maintain [low] inflation [and ensure it] remains under control,” said Arcandra in Jakarta on Monday as reported by kompas.com, after he announced the government plan to revise Presidential Regulation No. 191/2014 on procurement, distribution and fuel retail prices.

Under the planned revision, the government will require all fuel retailers to report any plan regarding increases to fuel prices, although Arcandra said the government would not intervene to fix prices.

The government will also oblige Pertamina to distribute subsidized Premium-brand gasoline across the country in response to the Premium shortage in many parts of the country, forcing motorists to buy non-subsidized fuel.

Previously, the Central Statistics Agency (BPS) said the price increase of Pertalite-branded gasoline and other non-subsidized fuels had seriously affected inflation. The agency said the proportion of the impact of the fuel price increase on March 24 was 0.04 percent out of 0.2 percent inflation for March. It is also expected to have an impact on inflation in April.

Currently, there is no control mechanism for fuel prices and fuel retailers often quietly increase prices in line with global crude oil prices.

BPS head Suhariyanto said the contribution of fuel to inflation was generally 3.39 percent.

Arcandra said in addition to the revision of the presidential regulation, the Energy and Mineral Resources Minister would also issue a derivative regulation. (bbn)

Source: http://www.thejakartapost.com/news/2018/04/10/new-fuel-distribution-policy-to-maintain-low-inflation-official.html