Govt won?t cut fuel prices in haste: Purnomo

The government would not cut the prices for fuel on the domestic market in haste in response to the declining oil price as there is no yet any certainty that the declining trend in the oil price would continue, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Thursday.

?Indeed, we shall implement the policy of cutting (fuel) prices but we are not sure yet (about it). Oil price is unpredictable,? Purnomo told reporters.

He said the government would only cut the fuel price if the decline in the oil price has become a strong trend.

He also said the retail price of Rp 4,500 set by state oil and gas company PT Pertamina for a liter of Premium gasoline included taxes.

The government more than doubled the prices of several types of fuel for public transportation, private vehicles and poor households last year to cut its energy subsidies.

This year, the government has allocated Rp 59 trillion in fuel subsidy but some analysts say the government does not need to subsidize fuel prices any longer following the decrease in oil prices over the past two months. They even call on the government to cut the fuel price.

On Wednesday, Director General of Oil and Gas at the Ministry of Energy and Mineral Resources Luluk Sumiarso said that his office was preparing a scheme for cutting subsidized fuel prices to anticipate the continuous fall in the oil prices in the world?s market.

He 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. If oil prices in Singapore (Mid Oil Platt?s Singapore/MOPS) drops, then the selling price for fuel might be lower than the price that has been set. On the other hand, if the MOPS price increases again, the ceiling price will be taken into effect. Under the Presidential Decree No. 55/2005, the ceiling price of kerosene is set at Rp 2,000, Premium gasoline at Rp 4.500 and diesel oil at Rp 4.300 per liter.

Purnomo, however, said the Directorate General of Oil and Gas was just making a ?calculation? on the possible impact of declining oil prices.

?It is not yet a (government) policy,? Purnomo said, adding that there is not yet any presidential decree authorizing the cutting of fuel price.

Purnomo added that he would discuss the issue with the Coordinating Minister of the Economy.

?First of all, we shall report to the leader (President) because this is an extraordinary policy. We should not be careless,? Purnomo said. (Godang)