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View all search resultsGovt dithers on potential fuel price hike
The government will not hike fuel prices heading into the new month despite growing pressure on the state budget because of a rapid rise in global oil prices as nations scramble for crude oil amid the United States-Israeli war on Iran.
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A motorist fills up with Pertamax fuel on Nov. 21, 2017, at a gas station in Jakarta. (Antara/Akbar Nugroho Gumay)
T
he government will not hike fuel prices heading into the new month despite growing pressure on the state budget because of a rapid rise in global oil prices as nations scramble for crude oil amid the United States-Israeli war on Iran.
The announcement raises questions over the policy direction after a widely circulated unofficial document pointed to plans for a steep increase in nonsubsidized fuel prices.
State Secretary Prasetyo Hadi said in a statement on Tuesday that there would be no increase "for subsidized or nonsubsidized" fuel on April 1 and urged citizens not to panic over "misinformation" about a pending price hike.
Nevertheless, long queues have formed at some gas stations across the country as motorists rush to fill up ahead of a feared price hike.
Prasetyo said in his statement that the decision was in line with President Prabowo Subianto’s directive to "prioritize the interests of the people."
Experts warn the decision weighs heavily on state-owned energy firm Pertamina.
“When global oil prices rise while domestic prices remain fixed, the gap between costs and selling prices widens, eroding Pertamina’s profit margins and cash flow,” Rizal Taufikurahman, head of the Center of Macroeconomics and Finance at the Institute for Development of Economics and Finance (INDEF), told The Jakarta Post on Tuesday.
