Gov't Prepares Special Provision on One Fuel Price Policy
21 October 2016 17:48 WIB
TEMPO.CO, Jakarta - The Energy and Mineral Resources Ministry is preparing a special scheme and regulation to initiate the One Fuel Price program for all Indonesian regions. I Gusti Nyoman Wiratmaja, Director General of Oil and Gas at the Energy and Mineral Resources (ESDM) Ministry said that the ministry is in the process of drafting a cross subsidy mechanism to equalize fuel prices across Indonesia.
"For example, between Jakarta and Papua, in Jakarta 30 tons [of fuel] are sold, while [in Papua] maybe only one ton was sold. Therefore, the [profit] margin in Papua must be higher [to provide more economic value]," Nyoman said on Thursday, October 20, 2016.
The government plans to revise the regulation on profit margin for gas station owners, which currently set at Rp 300 per liter. Wiratmaja said that the margin for gas stations located in remote regions will be larger compared to city areas in an effort to attract investors to building gas stations.
In addition, Nyoman said that there will be three options for fuel distribution depending on the destination region. The three options include sea transportation, land transportation, and air transportation. "For regions that do not have roads we’ll certainly have to use airplane, which costs Rp 30,000 per liter," Nyoman said.
Nyoman said that he will announce the maximum and minimum profit margin for gas stations. Nyoman stated that values for both margins are still being calculated and have not yet decided.
The One Fuel Price program was announced by President Joko "Jokowi" Widodo during his work visit to Papua last Tuesday. Jokowi said that he had prepared two airplane specifically to transport fuel. "Currently, there’s only two [airplane]. Later, there will be more, totalling five planes for Papua and North Kalimantan," Jokowi said.
Dwi Soetjipto, CEO of state-owned oil and gas company Pertamina said that he will cooperate with regional government to control fuel prices. Pertamina will also allow other distributors to make profits. "A 10 percent profit from Rp 6,450 to Rp 8,000 per liter is tolerable," Dwi said as quoted by Antara news agency.
Pertamina's Vice President for Fuel Marketing and Retail Affandi said that the company is in the middle of appointing 10 diesel fuel distributors (APMS) for remote areas. "APMS must comply with fuel price provisions," Affandi said while adding that APMS will be at the forefront of the One Fuel Price policy implementation.
FAJAR PEBRIANTO | ROBBY IRFANY