Economist Talks of Price Affordability if Pertalite Replaced by Pertamax Green 92
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1 September 2023 13:48 WIB
TEMPO.CO, Jakarta - An economist at the Center of Reform on Economics (Core) Mohammad Faisal assessed that the plan by state-owned oil and gas giant Pertamina to phase out Pertalite and replace it with Pertamax Green 92 is a good breakthrough for the country’s energy transition. But the plan could affect people’s purchasing power.
“People’s ability to pay the price [of the new fuel brand] needs to be considered. So, other than the quantity issue, we also need to look at the price issue,” Faisal told Tempo on Thursday, August 31, 2023.
On Wednesday, August 30, Pertamina Director Nicke Widyawati announced the plan to substitute the 90-octane gasoline with the environmentally friendly one, Pertamax Green 92, at a joint hearing with the House of Representatives (DPR) Commission VII.
Nicke said Pertamina has a vision to offer only three gasoline products in 2024, namely Pertamax Green 92, Pertamax Green 95, and Pertamax Turbo. Pertamax Green 92 is a fuel blend of Pertalite and seven percent ethanol, while Pertamax Green 95 is a fuel blend of 92-octane Pertamax and eight percent ethanol.
“If it (Pertalite) is phased out, will the price of Pertamax Green 92 be the same as Pertalite or more expensive?” Faisal questioned. “If it is more pricey, the purchasing power of the lower middle class could decline.”
However, if the government were to subsidize Pertamax Green 92, Faisal argued that the balance should be considered. This is because a high subsidy allocation could burden the State Budget, while a low subsidy could burden the people.
“This has to be a matter of concern,” Faisal emphasized.
Nicke has not yet specified the price of Pertamax Green 92 as internal discussions are still afoot. According to her, if the plan becomes a government program, the price will be then regulated by the government.
RIRI RAHAYU
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