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Jakarta Post

Minister wants new players in jet fuel business to bring down airfares

  • Stefanno Reinard Sulaiman

    The Jakarta Post

Jakarta   /   Thu, March 28, 2019   /   09:52 am
Minister wants new players in jet fuel business to bring down airfares Coordinating Maritime Affairs Minister Luhut Pandjaitan (tempo.co/File)

Coordinating Maritime Affairs Minister Luhut Pandjaitan said he wants to push for the emergence of a new player in the jet fuel or avtur business in an effort to lower airfares and boost tourism in the country.

One company that had expressed interest in becoming an avtur supplier is a joint venture firm established by publicly listed fuel trader PT AKR Corporindo and British energy giant BP.

“Why do we have to wait so long?” he said on Wednesday, adding that the government currently only saw AKR Corporindo as a potential new player in the domestic avtur market.

The market is currently dominated by state-owned energy company Pertamina.

He noted that the Energy and Mineral Resources Ministry was the institution authorized to issue permits for the avtur business.

Luhut said the government would introduce a policy to lower the avtur price by cutting both value-added tax and income tax.

The government wants to push down the avtur price as part of an effort to bring down airfares. Lower airfares are deemed necessary to help develop the tourist industry in many parts of the country.

President Joko “Jokowi” Widodo ordered the relevant officials to bring down airfares in early February in response to complaints by restaurant and hotel owners over low occupancy rates in a number of destinations.

He even criticized Pertamina for “monopolizing” the avtur business that was blamed for the high price of the commodity.  “Because of a monopolistic market, the price isn’t competitive. Many want to sell avtur, and it will lead to lower prices and encourage efficiency.” Jokowi said. (bbn)