Reform Team Proposes Subsidy for Pertamax

TEMPO.CO, Jakarta – The Gas and Oil Governance Reform Team has proposed to subsidize Research Octane Number (RON) 92, or known locally as Pertamax fuel, following recommendations to stop importing RON 88, known as Premium fuel. The subsidy is aimed at keeping the people from suffering further financial burden that might ensue from the planned termination of RON 88 import.

“The subsidy price of RON 92 must not burden the people,” said Faisal Basri, the team’s chairman, on Sunday.

According to Faisal, RON 92 subsidy must be higher than the subsidy for Premium, allowing for the former's higher quality. “We encourage higher subsidy for better quality,” he said.

He suggested the government allocate subsidy using a permanent subsidy pattern, e.g. Rp500 per liter for Pertamax. Faisal said now was the right moment for the government to reform its fuel subsidy policy given the declining global oil prices. “A permanent subsidy will reduce the chance of fluctuation in the State Budget,” he said.

Faisal added there was a possible price competition among fuel distributors since Pertamina, Shell and Total E&P would all sell RON 92. “I hope the people can buy cheaper Pertamax because the prices of this fuel are varied,” he said.

Reform Team member Darmawan Prasodjo said recommendations to provide subsidy for RON 92 would result in two Pertamax products available in the market. “There will be subsidized and non-subsidized RON 92,” he said. The government and Pertamina are still looking into this matter.

AYU PRIMA SANDI