Energy and Mineral Resources Ministry Oil and Gas Director General Djoko Siswanto has said the government’s decision to lower fuel prices is part of the implementation of a new fuel price formula that has been effective since Feb. 1.

He gave an assurance that the formula stated in Energy and Natural Resources Ministerial Decree No 19/2019 would create healthy competition among fuel retailers.

“The formula is to protect business players so that the competition [among them] is healthier. They cannot just reduce prices or generate too high margins,” Djoko told a press conference as reported by kontan.co.id on Monday.

State energy holding company Pertamina lowered its fuel prices on Sunday. Under the new policy, the price of non-subsidized Pertamax Turbo (RON 98) gasoline in Greater Jakarta has been set at Rp 11,200 (80 US cents) per liter, Pertamax (RON 92) at Rp 9,850 per liter, while Pertalite gasoline (RON 90) remains at Rp 7,650 per liter.

The price of non-subsidized diesel has been set at Rp 11,700 per liter for Dex and Rp 10,200 per liter for Dexlite. The company has also lowered subsidized Premium gasoline to Rp 6,450 per liter in Java, Madura and Bali (Jabali) from Rp 6,550 per liter.

Previously, Djoko explained that the new formula considered several components – the price of crude oil based on the Means of Platt Singapore (MOPS), oil procurement costs, storage costs, distribution costs, 5 to 10 percent margin, fuel tax and value added tax.

“The government needs to determine the margin that accommodates differences that we have analyzed and formulated,” Djoko added. (bbn)