Sign up | Log in



Home  >>   Daily News  >>   Indonesia >> Energy>>Indonesia plan to cut fuel prices to boost purchasing power sparks polemic
NEW UPDATES Asean Affairs  6 October  2015  

Indonesia plan to cut fuel prices to boost purchasing power sparks polemic

INDONESIAN President Joko Widodo’s plan to cut fuel prices in a bid to boost people’s purchasing power has sparked a polemic.

An observer has warned that the policy, which was set to be announced on Monday, would hit state-oil and gas firm Pertamina’s revenues while another analyst said impacts resulting from the price cut would be tolerable.

Reforminer Institute director Komaidi Notonegoro said on Sunday that the normal price of Premium – a low-specification gasoline – was Rp 6,500 (around US$0.44) per litre and that a lower retail price could eat into Pertamina’s earnings as fuel production costs had been rising this year.

“Most of our Premium is imported while the rupiah has continued to decline against the US dollar,” Komaidi said as quoted by Kontan.

However, an oil and gas observer from the University of Gadjah Mada, Fahmi Radhi, said Pertamina’s main problem would not be lower Premium prices but a lack of efficiency in its management. He said the fuel price should have been cut right after Pertamina’s Singapore-based trading arm, PT Pertamina Energy Trading Limited (Petral), was dissolved.

“The fuel price should be cut because Pertamina now buys crude oil and the fuel directly from the market, resulting in a shorter supply chain,” Fahmi argued.

Fahmi, who is a member of the reform team for oil and gas governance, estimated that a tolerable Premium price decrease would be Rp 500 to Rp 1,000 per litre from the existing price of Rp 7,400 per litre.

He rejected Pertamina’s claim that it had maintained a stagnant fuel price to offset accumulated losses in the past.

“This is not fair. (The cost of) Pertamina’s mismanagement in the past is now burdening the public as fuel consumers.”

Pertamina corporate communication vice president Wianda Pusponegoro said the state-owned oil and gas company had its own estimation on the viable Premium price.

“All of the estimations have been reported to the Energy and Mineral Resources Ministry as the regulator before it delivers them to the President,” she said.

Wianda said Pertamina had conducted efficiency programmes such as crude oil import centralisation, refinery operation efficiency and loss reduction.

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below

Today's  Stories                           October 6 , 2015 Subsribe Now !
• Domestic GDP likely to grow 6.5% in 2015 Subcribe: Asean Affairs Global Magazine
• IMF: economy is ‘overheating’ 
• Indofood to hedge, convert foreign debts
Research Reports
on Thailand 2007-2008

• Textiles and Garments Industry
• Coffee industry
• Leather and footwear industry
• Shrimp industry

• Exports up 20% in H1 on Europe purchases
• Indonesia plan to cut fuel prices to boost purchasing power sparks polemic
Asean Analysis                   September 24, 2015
• Asean Analysis September 24, 2015
Advertise Your Brand

Asean Stock Watch  October 5,   2015
• Asean Stock Watch-October 5, 2015
The Biweekly Update
• The Biweekly Update September 18, 2015

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent
• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand