Pertamina to raise Pertamax price by 27 percent

State owned oil and gas company Pertamina is studying the possibility of increasing the prices of high-octane fuel products Pertamax and Pertamax Plus by about 27 percent, as an adjustment to the higher crude oil prices in the international market, Bisnis Indonesia reported on Wednesday.

A. Faisal, the head of Pertamina's marketing division, said in Jakarta on Tuesday that the state owned oil company had proposed to increase the price of the non-subsidized fuel Pertamax to between Rp 5,000 and Rp 5,400 per litter from Rp 4,200 at present.

He said that the new price of higher grade Pertamax Plus would be Rp 200 higher than that of the proposed price of the more widely used Pertamax. "The increase is needed to cope with the sharp increase in the crude oil in the world's market in recent months," he added.

Meanwhile Vice President Jusuf Kalla said in Jakarta on Tuesday that the government was also studying the possibility of raising the prices of subsidized fuel products particularly diesel oil and Premium fuel in order to curb the sharp increase in the government's fuel subsidy.

The increase in the crude oil price to about US$60 per barrel recently from about US$35 per barrel last year has caused a sharp increase in the government's fuel subsidy.

He said that this year's fuel subsidy could reach Rp 120 trillion , far higher than the initial estimate of about Rp 76 trillion, if the prices of the fuel products were not adjusted to the current prices of the crude oil. (*)