Saturday, 7 December 2019

Government Demands Pertamina to Lower Prices of Jet Fuel

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Editor:

Mahinda Arkyasa

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  • TEMPO.CO, Jakarta - In an attempt to lower the prices of airplane tickets, the Indonesian Government continues to pressure state-owned energy company PT Pertamina to lower the price of jet fuel (avtur) despite Pertamina's claims that it is currently selling avtur at its most affordable price.

    Secretary of the Coordinating Minister for Economic Affairs Susiwijono Moegiarso, said that one major contributor to how much an airline sells its tickets is the price of jet fuel, which constitutes 30 percent of an airline's expenses.

    According to a statistic, Pertamina's avtur sold in multiple airports, including the Soekarno-Hatta International Airport, is the cheapest compared to other places such as Singapore, Hong Kong, Manila, and Kuala Lumpur.

    "However, we will still study the chances of having [avtur] price to be reduced up to a certain percent," said Susiwijono on Thursday, June 20, 2019.

    He asserted that the price depends on the Mean of Platts Singapore (MOPS) and the fluctuating exchange rate.

    The Coordinating Ministry of Economic Affairs previously announced that the government will introduce three policies following Transportation Ministry's Decree No.106/2019 on lowering the maximum tariff limit of airplane ticket.

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