Business

Pertamax prices break Rp
10,000 barrier

State-owned oil and gas firm PT Pertamina has increased prices for non-subsidized fuels, starting Sunday, due to the skyrocketing global prices for crude oil.

Pertamina spokesman M. Harun said Sunday that the increased prices reflected fluctuations in the market.

"We adjust the price of non-subsidized fuels every two weeks, on the first and fifteenth days of each month. The changes depend on market conditions," he told The Jakarta Post in a telephone interview.

The price of RON 92 Pertamax high-performance gasoline has gone up to Rp 10,200 (US$1.11) per liter, from Rp 9,850. Meanwhile, RON 95 Pertamax Plus is now being sold at Rp 10,350.

Harun said the price increases could potentially lead to problems.

"A lot of people might be discouraged from buying Pertamax. They might instead buy subsidized fuels, which are much cheaper," Harun said.

Both subsidized fuels, premium gasoline and diesel, are currently sold at Rp 4,500 per liter.

"With people rushing to buy subsidized fuels, it may force the government to re-adjust its yearly quota for subsidized fuels," Harun said.

"The quota cap right now is 40 million kiloliters for the entire year. But in the past three months, since January, 10.7 million kiloliters have already been consumed."

Harun said that if people rushed to buy subsidized fuels, the government would have no choice but to increase the quota.

"We are sure that it will happen," Harun said.

The cost of fuel subsidies are tied to the Indonesian Crude Price (ICP), which is set at US$105 per barrel, although Harun said the benchmark has reached $122 as of February.

To help alleviate the burden, the government has been working on a fuel conversion program to encourage the public to shift from oil-based fuels to using gas-based fuels such as liquefied petroleum gas (LPG).

Harun said that, so far, there has been no plan to increase LPG prices. (png)

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