T

he government on Monday discussed a possible fuel price cut with state-owned oil and gas firm Pertamina, which distributes fuel, ahead of a plan to announce a third economic policy package on Thursday.

President Joko '€œJokowi'€ Widodo held a meeting with economy ministers and Pertamina president director Dwi Soetjipto on Monday evening at the State Palace to discuss respective assessments of fuel prices.

No immediate final results were announced but Cabinet Secretary Pramono Anung said that '€œthe President has no intention to intervene with an increase or decrease in the price of fuel, electricity or gas'€.

'€œHowever, as the majority shareholder through the State-Owned Enterprises Ministry, the President naturally wants the calculation to be right at a time when people are in need,'€ Pramono added. '€œLeave the announcement of the result to Pertamina and PLN.'€

He also refused to confirm whether a fuel price cut would be a part of the upcoming third economic policy package.

During a limited Cabinet meeting attended by Dwi last week, Jokowi asked Pertamina to weigh the possibility of lowering the price of Premium gasoline to ensure that people benefited from cheaper oil prices in the world market.

The President has also asked state-owned electricity company PLN to explore the possibility of reducing electricity rates to help local industries.

The Energy and Mineral Resources Ministry had previously decided to maintain the prices of the widely sold Premium gasoline and subsidized diesel at Rp 7,300 and Rp 6,900 per liter, respectively. The prices have not changed since late March, despite the continued decline in oil prices in the world market, because of the weakening rupiah, which has made it more expensive to import fuel. According to the ministry, based on benchmark price assumptions and the rupiah-dollar exchange rate, Premium should be sold at a higher price.

Pertamina has said it booked at least Rp 15 trillion (US$1 billion) in losses, largely from selling Premium below its economical price, from January until August. The losses will probably rise, as the government decided not to increase prices this month.

'€œThe President asked [related parties] to keep calculating [fuel prices] so that the market can remain healthy while the people are helped,'€ said Energy and Mineral Resources Minister Sudirman Said.

According to Sudirman, government and state enterprises are now focusing on weighing the exchange rate, Indonesia crude price (ICP), global oil prices, distribution chain efficiency measures and how to manage losses at both Pertamina and PLN. Sudirman hinted the decision would be announced this week.

Earlier on Monday in Tangerang, Banten, Jokowi told reporters that an adjustment to fuel prices was '€œstill being calculated'€, adding that fuel could refer to Premium, diesel fuel or even aviation turbine fuel. '€œElectricity [prices] are still being calculated too,'€ he said.

Jokowi refused to reveal when the decision would be announced, but hinted it might be this week.

Dwi has previously said his office will evaluate the possibility of lowering fuel prices. '€œFrom our evaluation, current prices are still 2 percent below the market price,'€ he cautioned.

According to Dwi, Pertamina will look into efficiency measures that would allow it to lower the price of Premium.