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Fuel prices should drop by Rp 200-Rp 500 per liter: ReforMiner
The government is expected to cut fuel prices by between Rp 200 (1 US cent) to Rp 500 per liter by the end of this month, following the persistent drop in oil prices and in light of the stable rupiah.
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A gas station employee serves motorists in Cikini, Central Jakarta. The government is set to announce a subsidized fuel price cut by the end of March. (ANTARA FOTO/Sigid Kurniawan)
Ayomi Amindoni
The government is expected to cut fuel prices by between Rp 200 (1 US cent) to Rp 500 per liter by the end of this month, following the persistent drop in oil prices and in light of the stable rupiah.
Jakarta-based research group ReforMiner Institute's executive director Komaidi Notonegoro argued that with the current global price of oil resting at around $30 per barrel and the stable rupiah, the government should cut the prices of subsidized diesel, gasoline and kerosene.
"We expect the fuel price will come down by about Rp 200 to Rp 500 per liter. The government will deliberately cut the prices with reference to the market price," Komaidi told thejakartapost.com on Monday.
Currently, the price of subsidized Premium gasoline in Java, Madura and Bali stands at Rp 7,050 per liter. Outside the three islands, Premium is sold for Rp 6,950 per liter, subsidized diesel for Rp 5,659 per liter and kerosene for Rp 2,500.
Further, ReforMiner projected that oil prices would remain flat until the end of 2017, giving the government more room to remove subsidies on diesel. "It is relatively within the range of people's purchasing power, provided that the rupiah remains stable," he said.
Earlier, Energy and Mineral Resources Minister Sudirman Said confirmed that new fuel prices would be announced on March 29 or March 30. According to him, the decision was part of the ministry’s commitment to review fuel prices on a quarterly basis.
However, he explained that the price cut would be milder than the drop in the world oil price might suggest, as the government planned to keep some portion of the margin to shore up the budget. (ags)
