KPPU to Launch Investigation into Jet Fuel Prices

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  • Bahan bakar pesawat Avtur. ANTARA FOTO

    Bahan bakar pesawat Avtur. ANTARA FOTO

    TEMPO.CO, Jakarta - The Business Competition Supervisory Commission (KPPU) is planning an investigation into high prices of avtur (aviation turbine fuel) sold by state oil-and-gas company Pertamina, which is suspected as the chief cause of skyrocketing operational costs of airlines. 

    KPPU director of policy advocacy and evaluation Taufik Ahmad said that KPPU was aware of jet fuel's high prices from media reports. "We plan to find out whether the high prices are caused by Pertamina's monopoly or if there are other contributing factors," said Taufik Ahmad at his office on Monday, September 29, 2014. 

    According to Taufik, KPPU has summoned a number of involved parties, namely representatives from Pertamina and the Indonesian National Air Carriers Association (INACA). "We plan to summon representatives from the Downstream Oil-and-Gas Regulatory Agency (BPH MIGAS)," he said. 

    Previously, INACA chairman Arif Wibowo said jet fuel prices in Indonesia were the highest in the Association of South East Asian Nations (ASEAN) region, an allegation that has been sounded by national flag carrier Garuda Indonesia. 

    Recently, State-owned Enterprises Minister Dahlan Iskan has permitted Garuda Indonesia to purchase jet fuel from companies other than Pertamina. "If Garuda's administrator believes that Pertamina's jet fuel is too expensive, they can purchase jet fuel from other companies," said Dahlan on September 18, 2014. 

    Only after KPPU receives BPH MIGAS' explanation will KPPU publish their findings on the matter. "If there are factors that are stopping Pertamina from selling jet fuel at economical prices, regulators need to know about it," said Taufik.