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Government agency BPH Migas calls for lower fuel prices amid global oil slump
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Downstream Oil and Gas Regulatory Agency (BPH Migas) head Fanshrullah Asa speaks in a webinar on Friday. (JP/Screenshot)
T
he government agency in charge of downstream oil and gas policies is calling for lower fuel prices “as soon as possible” in light of the global oil price slump, while the energy ministry maintains a wait-and-see approach.
Downstream Oil and Gas Regulatory Agency (BPH Migas) head Fanshrullah Asa said on Friday his office “wanted fuel prices – while global oil prices are falling – to fall too, as social fairness to the people”. BPH Migas reports directly to the President, but fuel prices are regulated by the Energy and Mineral Resources Ministry.
“This should happen as soon as possible,” said Fanshrullah, speaking at a webinar about the state of Indonesia’s downstream oil and gas industry against the backdrop of the COVID-19 pandemic. Global crude oil prices are projected to average $35 per barrel this year, almost half of last year’s $61.4 per barrel, according to the World Bank.
Observers, legislators and some business players have voiced support for lower fuel prices in Indonesia as global crude oil prices take a beating from record-low global consumption levels.
Read also: Explainer: What does the oil price crash mean for Indonesia?
In Indonesia, Southeast Asia’s top oil consuming country, daily fuel consumption was 30 percent below normal in April as cities and provinces implement partial lockdowns, based on data from state-owned oil company Pertamina, the country’s largest fuel distributor.
The world’s top oil exporting nations, also known as OPEC+, recently agreed to cut global crude oil production by a steep 9.7 million barrels per day in May and June, which is expected to raise oil prices over the year.
The energy ministry has raised concerns over a public and political backlash if the government were to lower government-administered fuel prices today then raise them again when global crude prices recover over the year.
“The government is still monitoring and evaluating developments related to oil prices,” Energy and Mineral Resources Ministry spokesman Agung Pribadi said in a previous statement.
The ministry had issued a ministerial decree in February that scraps the price floor and introduces a new calculation formula for the price ceiling, giving room for lower prices and preventing wild price increases.
