Pertamina, AKR urge government to increase price of subsidized fuel products
Thursday, December 29 2016 - 03:33 AM WIB
State-owned oil and gas firm PT Pertamina, and IDX-listed fuel distribution company PT AKR Corporindo Tbk have urged the government to soon revise upward the price of subsidized fuel products amid rising oil price.
Vice President of Pertamina, Ahmad Bambang told Petromindo.com on Wednesday that his company has ?suffered losses? from distributing the subsidized automotive diesel and RON 88 Premium brand gasoline as the price of non-subsidized fuel products has risen in line with rising international price of oil.
He suggested the government to at least increase the price of the RON 88 Premium gasoline as it would not have significant effect on inflation and on poor income people. He added that increasing the price will also help prevent smuggling of the fuel overseas due to the price gap.
A source at AKR has also asked for the government to increase the price of subsidized automotive diesel as the company has suffered losses in distributing the fuel due to price gap with the non-subsidized automotive diesel.
The government recently decided to maintain the price of subsidized RON 88 gasoline, automotive diesel, and kerosene for the first quarter of 2017 despite rising trend in international oil price to help maintain purchasing power of the people. The Ministry of Energy and Mineral Resources said it will review the price after three months.
For 2017, Pertamina has been assigned by the government to distribute 16.31 million kilo liters of the subsidized fuel products, comprising of 610,000 kl of kerosene and 15.7 million kl of automotive diesel oil. Meanwhile, AKR will distribute 300,000 kl of automotive diesel oil.
Editing by Reiner Simanjuntak