Govt has no plan to lower prices of subsidized fuels

The government has no plan to lower prices of subsidized fuels despite the sharp drop in the crude oil prices in the world market during the past several weeks, Finance Minister Sri Mulyani Indrawati has said.

Speaking to reporters in Jakarta on Friday, Sri Mulyani acknowledged that there were significant drops in crude oil prices during the past several weeks but the government was still uncertain if the crude prices would stay at the current levels given the uncertainty in the world economy.

With such uncertainty development in the world economy as well as the sharp fluctuation of the crude oil prices, the government would continue to keep the prices of subsidized fuels at the current level.

Although the fall in the crude prices would result in the drop in the government?s fuel subsidy, the prices of subsidized fuels would not be increased, at least for now, she said, adding that the government also had no plan to adjust the crude price reference in the state budget until there was a stability in the world crude oil market.

An OPEC attempt to stem the free-fall in oil prices fizzled Friday with crude futures dropping below $65 a barrel to lows last seen 15 months ago on world economic fears, despite the 13-member group's decision to slash daily production by 1.5 million barrels. The crude oil price has lost more than 50 percent since it broke its historic high of $150 per barrel in July.

In May, this year the government raised the prices of subsidized fuels as an adjustment to the surge in the world crude prices. The price of subsidized Premium fuel was raised to Rp 6,000 per liter from Rp 4,500, while the price of the subsidized diesel fuel was increased to Rp 5,500 per liter from Rp 4,300. The price of the heavily subsidized kerosene was raised to Rp 2,500 per liter from Rp 2,000 per liter.

Separately, Pertamina said that the company also had no plan to increase the prices of its non-subsidized fuels despite the sharp drop in the prices of the crude oil. The company continues to keep the prices of its high octane Pertamax, Pertamax Plus and Pertamina Dex at the current levels of Rp 7,950 and Rp 8,300 and Rp 9,100 per liter, respectively.

Pertamina?s vice president for communication Anang Riskandi Noor said that the state-owned oil company had yet to adjust the prices of its non-subsidized fuels because its two main competitors Shell and Petronas still maintained their old prices.

Petronas still sells its Primax 92 and Primax 95 for Rp 8,050 and Rp 8,550 per litter, respectively, while Shell continues to sell its Shell Super and Shell Super Extra at Rp 7,950 and Rp 8,300 per litter, respectively. (*)