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Transport Ministry proposes breaking up aviation fuel monopoly
Having more than one aviation fuel provider would mean challenging state-owned oil and gas company Pertamina’s monopoly.
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Green flight: Technicians prepare a Garuda Indonesia plane for a test flight using sustainable aviation fuel on Oct. 27, 2023, at Soekarno-Hatta International Airport in Tangerang, Banten. The plane successfully landed in Adi Sumarmo Airport in Surakarta, Central Java, later that day.
(Antara/Farhan Arda Nugraha)
T
he Transportation Ministry has recommended that there be more than one aviation fuel provider, as this would lead to more competitive fuel prices for airlines, which in turn could help end prolonged high airfare.
Having more than one aviation fuel provider would mean challenging state-owned oil and gas company Pertamina’s monopoly.
“The Transportation Ministry has written a letter to Coordinating Maritime Affairs and Investment Minister [Luhut Pandjaitan] regarding the suggestions and considerations about the multi-provider aviation fuel,” ministry transportation policy agency head Robby Kurniawan said on Saturday, as quoted from Bisnis.
Indonesia’s domestic airfare prices are high, and businesses blame this for hampering the recovery of the country’s tourism industry.
Statistics Indonesia (BPS) data shows that only 62.55 million people took domestic flights last year, which remained below the pre-pandemic level of 76.69 million in 2019.
Read also: Govt rules out aviation fuel as cause of persistently high airfares
The Transportation Ministry once estimated that aviation fuel contributed over 45 percent of the total operating costs faced by airlines and the Business Competition Supervisory Commission (KPPU) in February said fuel prices were a leading cause behind high flight ticket prices.
