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Ada Pertanyaan? Hubungi Kami
Robert Sidauruk, Kartini L Makmur
While the public has generally accepted the new subsidized fuel price and compared to past similar increases negative reaction has been subdued, an emerging view is that the formulation used by the government to determine its price under Presidential Regulation No. 191 of 2014, will in the short term likely create difficulties for gas station businesses and even the public itself in the long term.
Under the Presidential Regulation, the basic price of fuel is calculating based on several types of cost components such as receiving, distribution, storage, and margin costs. Receiving costs are the costs incurred by businesses to stock fuel from local or overseas oil refineries at fueling stations based on a market index price.
The government is using the Mean of Platt Singapore/MoPS metric as the market index price benchmark, which is currently set at USD 60 per barrel. The retail price of fuel is determined by adding the basic price with value added tax (PPN) and the Fuel Tax for Motor Vehicles (PBBKB).
To avoid losses being incurred by gas station businesses as a result of selling old stock fuel with a lower retail price, Agus Cahyono Adi, Director of the Oil and Gas Development Program at the Ministry of Energy and Natural Resources (ESDM), explained that the government has included an additional component for formulating fuel prices.
This additional component, according to Mr. Adi, is up to IDR 350 per liter, depending on the fuel stocks held by Pertamina and a fuel station business. Mr. Adi did not, however, further on this additional cost component.
“This additional component is imposed to avoid losses to fueling station businesses,” commented Mr. Adi.
Future Detriments to the Public
Mr. Adi explained that the new subsidized fuel price will be different for each area in Indonesia. Outside Java, Madura, and Bali , the subsidized fuel price is IDR 6.600/liter, for Java and Madura it is set at IDR 6,700/litter, and in Bali IDR 7,000/litter.
Mr. Adi informed that the fuel price in Bali is more expensive than other areas as the local government sets a higher PBBKB of 10%, while other areas set it at 5%.
Marwan Batubara, an energy expert at Indonesian Resources Studies (IRESS), contends that the new formulation for calculating the price of subsidized fuel will harm the public in the future. He argues this will occur as the government is using current world fuel price trends to revoke the fuel subsidy.
Mr. Batubara further contends that there is strong possibly of oil prices rebounding in 2015, taking the world’s fuel price back to the USD 90 – 100 per barrel level, at which time the government will likely be forced to increase the price of subsidized fuel to IDR 10,500-11,000 per liter, as a consequences of revoking the subsidy.
“A decision to revoke the subsidy for fuel can be implied by the government lowering fuel prices,” said Mr. Batubara.
However, the Minister of ESDM, Sudirman Said, emphasized that the government will not increase fuel prices in the future in responses to changes in global fuel prices. Mr. Said says that the government is currently planning to set fixed fuel prices at certain levels and as a consequence there will be no longer be changes to the price of subsidized fuel. Currently, however, Mr. Said has said that he is unable to come out with the actual figure of the fixed fuel price as it currently being discussed by the government.
“If the world’s fuel prices goes below the fixed prices, the government will use the margin to accelerate the development of strategic sectors,” added Mr. Said.
(hot/kc)
While the public has generally accepted the new subsidized fuel price and compared to past similar increases negative reaction has been subdued, an emerging view is that the formulation used by the government to determine its price under Presidential Regulation No. 191 of 2014, will in the short term likely create difficulties for gas station businesses and even the public itself in the long term.Under the Presidential Regulation, the basic price of fuel is calculating based on several types of cost components such as receiving, distribution, storage, and margin costs. Receiving costs are the costs incurred by businesses to stock fuel from local or overseas oil refineries at fueling stations based on a market index price.
The government is using the Mean of Platt Singapore/MoPS metric as the market index price benchmark, which is currently set at USD 60 per barrel. The retail price of fuel is determined by adding the basic price with value added tax (PPN) and the Fuel Tax for Motor Vehicles (PBBKB).
To avoid losses being incurred by gas station businesses as a result of selling old stock fuel with a lower retail price, Agus Cahyono Adi, Director of the Oil and Gas Development Program at the Ministry of Energy and Natural Resources (ESDM), explained that the government has included an additional component for formulating fuel prices.
This additional component, according to Mr. Adi, is up to IDR 350 per liter, depending on the fuel stocks held by Pertamina and a fuel station business. Mr. Adi did not, however, further on this additional cost component.
“This additional component is imposed to avoid losses to fueling station businesses,” commented Mr. Adi.
Future Detriments to the Public
Mr. Adi explained that the new subsidized fuel price will be different for each area in Indonesia. Outside Java, Madura, and Bali , the subsidized fuel price is IDR 6.600/liter, for Java and Madura it is set at IDR 6,700/litter, and in Bali IDR 7,000/litter.
Mr. Adi informed that the fuel price in Bali is more expensive than other areas as the local government sets a higher PBBKB of 10%, while other areas set it at 5%.
Marwan Batubara, an energy expert at Indonesian Resources Studies (IRESS), contends that the new formulation for calculating the price of subsidized fuel will harm the public in the future. He argues this will occur as the government is using current world fuel price trends to revoke the fuel subsidy.
Mr. Batubara further contends that there is strong possibly of oil prices rebounding in 2015, taking the world’s fuel price back to the USD 90 – 100 per barrel level, at which time the government will likely be forced to increase the price of subsidized fuel to IDR 10,500-11,000 per liter, as a consequences of revoking the subsidy.
“A decision to revoke the subsidy for fuel can be implied by the government lowering fuel prices,” said Mr. Batubara.
However, the Minister of ESDM, Sudirman Said, emphasized that the government will not increase fuel prices in the future in responses to changes in global fuel prices. Mr. Said says that the government is currently planning to set fixed fuel prices at certain levels and as a consequence there will be no longer be changes to the price of subsidized fuel. Currently, however, Mr. Said has said that he is unable to come out with the actual figure of the fixed fuel price as it currently being discussed by the government.
“If the world’s fuel prices goes below the fixed prices, the government will use the margin to accelerate the development of strategic sectors,” added Mr. Said.
(hot/kc)
Robert Sidauruk, Kartini L Makmur
While the public has generally accepted the new subsidized fuel price and compared to past similar increases negative reaction has been subdued, an emerging view is that the formulation used by the government to determine its price under Presidential Regulation No. 191 of 2014, will in the short term likely create difficulties for gas station businesses and even the public itself in the long term.
Under the Presidential Regulation, the basic price of fuel is calculating based on several types of cost components such as receiving, distribution, storage, and margin costs. Receiving costs are the costs incurred by businesses to stock fuel from local or overseas oil refineries at fueling stations based on a market index price.
The government is using the Mean of Platt Singapore/MoPS metric as the market index price benchmark, which is currently set at USD 60 per barrel. The retail price of fuel is determined by adding the basic price with value added tax (PPN) and the Fuel Tax for Motor Vehicles (PBBKB).
To avoid losses being incurred by gas station businesses as a result of selling old stock fuel with a lower retail price, Agus Cahyono Adi, Director of the Oil and Gas Development Program at the Ministry of Energy and Natural Resources (ESDM), explained that the government has included an additional component for formulating fuel prices.
This additional component, according to Mr. Adi, is up to IDR 350 per liter, depending on the fuel stocks held by Pertamina and a fuel station business. Mr. Adi did not, however, further on this additional cost component.
“This additional component is imposed to avoid losses to fueling station businesses,” commented Mr. Adi.
Future Detriments to the Public
Mr. Adi explained that the new subsidized fuel price will be different for each area in Indonesia. Outside Java, Madura, and Bali , the subsidized fuel price is IDR 6.600/liter, for Java and Madura it is set at IDR 6,700/litter, and in Bali IDR 7,000/litter.
Mr. Adi informed that the fuel price in Bali is more expensive than other areas as the local government sets a higher PBBKB of 10%, while other areas set it at 5%.
Marwan Batubara, an energy expert at Indonesian Resources Studies (IRESS), contends that the new formulation for calculating the price of subsidized fuel will harm the public in the future. He argues this will occur as the government is using current world fuel price trends to revoke the fuel subsidy.
Mr. Batubara further contends that there is strong possibly of oil prices rebounding in 2015, taking the world’s fuel price back to the USD 90 – 100 per barrel level, at which time the government will likely be forced to increase the price of subsidized fuel to IDR 10,500-11,000 per liter, as a consequences of revoking the subsidy.
“A decision to revoke the subsidy for fuel can be implied by the government lowering fuel prices,” said Mr. Batubara.
However, the Minister of ESDM, Sudirman Said, emphasized that the government will not increase fuel prices in the future in responses to changes in global fuel prices. Mr. Said says that the government is currently planning to set fixed fuel prices at certain levels and as a consequence there will be no longer be changes to the price of subsidized fuel. Currently, however, Mr. Said has said that he is unable to come out with the actual figure of the fixed fuel price as it currently being discussed by the government.
“If the world’s fuel prices goes below the fixed prices, the government will use the margin to accelerate the development of strategic sectors,” added Mr. Said.
(hot/kc)
While the public has generally accepted the new subsidized fuel price and compared to past similar increases negative reaction has been subdued, an emerging view is that the formulation used by the government to determine its price under Presidential Regulation No. 191 of 2014, will in the short term likely create difficulties for gas station businesses and even the public itself in the long term.Under the Presidential Regulation, the basic price of fuel is calculating based on several types of cost components such as receiving, distribution, storage, and margin costs. Receiving costs are the costs incurred by businesses to stock fuel from local or overseas oil refineries at fueling stations based on a market index price.
The government is using the Mean of Platt Singapore/MoPS metric as the market index price benchmark, which is currently set at USD 60 per barrel. The retail price of fuel is determined by adding the basic price with value added tax (PPN) and the Fuel Tax for Motor Vehicles (PBBKB).
To avoid losses being incurred by gas station businesses as a result of selling old stock fuel with a lower retail price, Agus Cahyono Adi, Director of the Oil and Gas Development Program at the Ministry of Energy and Natural Resources (ESDM), explained that the government has included an additional component for formulating fuel prices.
This additional component, according to Mr. Adi, is up to IDR 350 per liter, depending on the fuel stocks held by Pertamina and a fuel station business. Mr. Adi did not, however, further on this additional cost component.
“This additional component is imposed to avoid losses to fueling station businesses,” commented Mr. Adi.
Future Detriments to the Public
Mr. Adi explained that the new subsidized fuel price will be different for each area in Indonesia. Outside Java, Madura, and Bali , the subsidized fuel price is IDR 6.600/liter, for Java and Madura it is set at IDR 6,700/litter, and in Bali IDR 7,000/litter.
Mr. Adi informed that the fuel price in Bali is more expensive than other areas as the local government sets a higher PBBKB of 10%, while other areas set it at 5%.
Marwan Batubara, an energy expert at Indonesian Resources Studies (IRESS), contends that the new formulation for calculating the price of subsidized fuel will harm the public in the future. He argues this will occur as the government is using current world fuel price trends to revoke the fuel subsidy.
Mr. Batubara further contends that there is strong possibly of oil prices rebounding in 2015, taking the world’s fuel price back to the USD 90 – 100 per barrel level, at which time the government will likely be forced to increase the price of subsidized fuel to IDR 10,500-11,000 per liter, as a consequences of revoking the subsidy.
“A decision to revoke the subsidy for fuel can be implied by the government lowering fuel prices,” said Mr. Batubara.
However, the Minister of ESDM, Sudirman Said, emphasized that the government will not increase fuel prices in the future in responses to changes in global fuel prices. Mr. Said says that the government is currently planning to set fixed fuel prices at certain levels and as a consequence there will be no longer be changes to the price of subsidized fuel. Currently, however, Mr. Said has said that he is unable to come out with the actual figure of the fixed fuel price as it currently being discussed by the government.
“If the world’s fuel prices goes below the fixed prices, the government will use the margin to accelerate the development of strategic sectors,” added Mr. Said.
(hot/kc)