Govt May Lower Pertalite Price Under Certain Conditions

TEMPO.CO, Jakarta - The Energy and Mineral Resources (ESDM) Ministry’s Director General of Oil and Gas, Tutuka Ariadji, said there is an opportunity for the government to lower the price of subsidized fuel or Pertalite. This opportunity opens if global oil prices decline.

“[It depends on] the oil price. If it reaches US$65, we have to calculate that actually, the price has to be lowered,” Tutuka told reporters at the Downstream Oil and Gas Regulatory Agency (BPH Migas) Office on Monday, April 10, 2023.

“If it [oil price] is not [dropping], I think it [the price of Pertalite] will not be lowered,” he added.

At present, global oil prices have risen to above US$80 per barrel. So, government subsidies are still needed. Pertalite now costs Rp10,000 per liter.

The Energy and Mineral Resources Ministry stated that the average Indonesian Crude Price (ICP) in March 2023 fell by US$4.89 to US$74.59 per barrel. The ICP as of February was US$79.48 per barrel. This is contained in the ESDM Minister’s Decree Number 131.K/MG.03/DJM/2023 concerning Indonesian Crude Oil Prices for March 2023 dated April 3, 2023.

Market concern over global economic conditions, especially in Europe and the US, due to the shutdown of Silicon Valley Bank on March 10 was thought to be a factor affecting global oil prices. This was as reported by the Executive Summary of the Indonesian Crude Oil Price Team.

“Apart from that, market players’ concern about higher-than-expected inflation increased fears of rising interest rates, strengthening dollar exchange rate, and slowing economic activity, which lead to lowered demand for crude oil,” as quoted from the ESDM Ministry’s press release on Monday, April 3, 2023.

RIRI RAHAYU

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