Ministerial Regulation No. 34/2018 on fuel price formula stipulates that the profit margin for non-subsidized fuels cannot exceed 10 percent.

The ministry’s oil and gas director general, Djoko Siswanto, said the draft regulation was complete and awaiting approval from Minister Ignasius Jonan.

He said the new formula would help the government determine whether non-subsidized fuel prices reflected global oil prices. "When global crude price is down, the fuel price should also decrease. To determine the price change, we need to have a rigid range," he said.

He explained that the new formula would consider several components -- crude price based on the Means of Platt Singapore (MOPS), oil procurement costs, storage costs, distribution costs, 10 percent margin, fuel tax and value added tax.

He said the average price of MOPS would be revised once a month rather than once every three months to more accurately reflect global oil prices.

The government will also determine minimum and maximum prices for the fuels, Djoko said, adding that once the new formula was approved, the ministry could use it to review the proposal for non-subsidized fuel prices from fuel producers. 

The government will warn retailers that did not adhere to the minimum and maximum prices. (bbn)

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