Exporters required to buy fuel at international prices

State oil and gas company Pertamina has imposed international prices in the sales of fuel to export-oriented companies in a bid to cut the government's subsidy from the domestic sales of the fuel, Neraca daily issued by state oil and gas company Pertamina.

According to Pertamina's circulation letter dated on May 1, the price of gasoline is set at 20.82 U.S. cent, those of kerosene at 20.73 U.S. cent, automotive diesel oil at 19.91 U.S. cent, industrial diesel oil at 19.64 U.S. cent and bunker oil at 17.09 U.S. cent.

The international prices affect companies, which export at least 50 percent of their products, or those, which are exempted from valued added tax. The prices do not include the 10 percent valued added tax.

Pertamina spokesman Ramli Djaafar confirmed the price regulation, saying that the imposition of the international prices on the sales of fuel to export-oriented companies are needed to reduce the government's subsidy in the domestic sales of fuel.

"The different price quotation is necessary in order to reduce the government's subsidy," he said. (*)