TEMPO.CO, Jakarta - The nuclear agreement signed between the United States and Iran, followed by embargo lifting on Iran will likely to reduce international oil prices. However, Lana Soelistianingsih, an economist from the University of Indonesia, viewed that it would not necessarily reduce fuel prices in Indonesia.
"The prices for unsubsidized fuels should follow the current international price," Lana told Tempo on Wednesday, July 22, 2015.
However, Lana added, Pertamina must consider operational costs and its roles in price stabilization.
According to Lana, Pertamina had to maintain fuel prices despite oil price hike three months before Lebaran and hence must bear the fluctuation of the prices.
"I'm not sure whether there was government intervention. But if the fuel prices increase, it would have bigger impacts on the people," she said.
Meanwhile, Lana added, Pertamina would use a momentum of fuel price decrease to cover losses by maintaining the price.
Lana explained that the declining oil price to US$50 per barrel was caused by a sentiment. The real one would happen when the Iranian oil production quota returned to normal from 500,000 barrels to two million barrels per day.
"The signs [of declining oil prices] would be apparent in the fourth quarter," Lana said.
Lana revealed that the declining international oil prices would be a dilemma for a country. On one hand, the declining fuel prices would be helpful to boost public's purchasing power. On the other hand, state income would be reduced due to declining commodity prices and export royalties.