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Pertamina says fuel prices need to be increased
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Residents of Latu village, Seram Island, Maluku, stop at the area's first-ever gas station. (JP/Nethy Dharma Somba)
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tate-owned energy company Pertamina has said fuel prices -- particularly subsidized gasoline Premium and subsidized diesel fuel Solar -- must be increased to avoid further burdening the company.
Pertamina marketing director Muchamad Iskandar said subsidized fuel prices had not changed since April 2016, when it was Rp 6,550 (US$0.48 US cents) per liter for Premium and Rp 5,150 per liter for Solar.
Global fuel prices were at $37 per barrel at that time, while currently it is around $60 per barrel.
“It is the authority of the government, but if we follow the price formula, we have to increase the prices,” said Iskandar as reported by kontan.co.id, adding that according to the formula, the price of Premium should be Rp 7,150 per liter.
Another burden for Pertamina is the single-price fuel program, which has been implemented in 54 remote areas across the country.
Iskandar said the cost to distribute one liter of fuel via air to remote areas could reach Rp 23,000 per liter while Pertamina had to sell only Rp 5,150 per liter for Solar.
For that, Pertamina needed to prepare Rp 1 trillion for additional operating expenses (OPEX) to carry out the single-price fuel program in one year. He added if 52 more areas follow the program, the OPEX could reach between Rp 2 trillion and 3 trillion. (bbn)
