TEMPO.CO, Jakarta - President Joko ‘Jokowi’ Widodo has ordered a recalculation of the price of jet fuel or avtur to make it more efficient.
"I have ordered to recalculate [the price]. We will soon take a decision on this," said President Jokowi at the State Palace on Wednesday. Feb. 13.
Earlier, Jokowi received a report from Indonesian Hotel and Restaurant Association (PHRI) chairman Haryadi Sukamdani who said that the airfare hike had affected the performance of tourism in the country.
The airfare hike is reportedly caused by a monopoly jet fuel price allegedly committed by state energy company Pertamina. Haryadi hoped the government would handle the situation.
Jokowi, however, has yet to give clear information on when will the new avtur price to be announced. He argued that the decision was pending the experts' official statements.
Avtur price has contributed to 24 percent of airfare, according to the Ministerial Decree no. 14/2016.
Airlines evaluation showed that avtur price has contributed to 40 percent of the operational cost. Therefore, further evaluation of components that might affect the basic airfares would be needed.
The current avtur VAT for Indonesian airlines is 10 percent and has been imposed since 2003. Meanwhile, once distributed to neighboring countries in Southeast Asia, it remains under 10 percent.