Govt prepares scheme for cutting prices of subsidized fuels
Thursday, November 9 2006 - 01:39 AM WIB
Director General of Oil and Gas of The Energy and Mineral Resources Ministry Luluk Sumiarso said that under the coming scheme, which will be different from the previous one, the selling price will be automatically set based on the ceiling price for subsidized fuels. ?The selling price will be set in accordance with the Presidential Regulation No. 55, Year 2005,? he said.
?If later, the standard oil prices in Singapore (Mid Oil Platt?s Singapore/MOPS) drops, then the selling price might be lower than the price that has been set,? he said in a meeting to discuss the selling prices of fuels in Jakarta on Wednesday.
On the other hand, he said, if the MOPS price increases again, the ceiling price will be taken into effect. Under the Presidential Regulation, the ceiling price of kerosene is set at Rp 2,000, premium at Rp 4.500 and diesel oil at Rp 4.300 per liter.
Luluk said that the prices of fuels will be lowered periodically, at least in one month.
He is optimistic that the scheme will gradually reduce the amount of subsidy given by the government considering that currently the price is below the ceiling limit.
The scheme should first get an approval from the Ministry of Energy and Mineral Resources Purnomo Yusgiantoro before being in use. ?Also, we will first receive comments and inputs from the Coordinating Minister for Economy,? he said.
Purnomo last week disclosed the government?s plan cut prices of subsidized fuels next year. The continuous fall in the prices of oil in the world?s market made the price gap between subsidized and international fuels range only between Rp 300 and Rp 400 per liter.
Meanwhile, state oil and gas company PT Pertamina?s president director Iin Arifin Takhyan said that the company once proposed the scheme in 2001. ?We agree with the scheme because basically, the price of oil fluctuates,? he said.(*)