Pertamina`s Vice President Corporate Communication Wianda Pusponegoro noted that the prices of fuel oils were lowered in line with the decline in global crude oil prices.
Jakarta (ANTARA News) - State-owned oil and gas company Pertamina has reduced the prices of its Pertamax, Pertamax Plus, Pertamina Dex, and Pertalite types of fuels by Rp200 per liter, effective from March 30, 2016.

These fuels are non-subsidized or non-Public Service Obligation (PSO) oils whose prices were cut and came into effect earlier than the reduction in the prices of Premium gasoline and subsidized diesel fuels, which will also be lowered and become effective on April 1, 2016.

Pertaminas Vice President Corporate Communication Wianda Pusponegoro noted in a press statement on Tuesday that the prices of fuel oils were lowered in line with the decline in global crude oil prices.

"In mid-March, Pertamina had cut the prices of non-PSO fuels by Rp200 per liter and became effective on March 15. Now, it has reduced them again by Rp200 per liter, which came into effect as of midnight of March 30, 2016," she remarked.

Pusponegoro said with the decision to cut the prices of non-PSO fuels, the price of Pertamax in Jakarta was reduced from Rp7,750 per liter to Rp7,550 per liter, Pertalite from Rp7,300 per liter to Rp7,100 per liter, and Pertamax Plus from Rp8,650 per liter to Rp8,450 per liter.

The price of Pertamina Dex went down from Rp8,600 per liter to Rp8,400 per liter and that of non-subsidized bio-diesel from Rp7,150 per liter to Rp6,950 per liter, taking into account the conversion rate at the central bank (BI) on Wednesday at Rp13,296-Rp13,430 per US dollar.

"The Rp200 cut per liter is imposed on non-PSO fuels in all regions," Pusponegoro stated while referring to the disparity in fuel prices in different regions.

She hoped that the reduction in fuel prices would be welcomed by consumers who can use any type of fuels based on the machine classification of their respective vehicles.

Besides the lowering of non-PSO fuel prices by Pertamina, the government has also planned to cut the prices of Premium gasoline and subsidized diesel oil, effective as of April 1, 2016. However, the extent of price cut was to be announced by Tuesday night (March 29).

Pusponegoro stated that Pertamina will also take anticipatory measures in the face of a possible rise in fuel consumption after their prices were reduced.

"After the prices are lowered, fuel consumption usually increases. Pertamina will take steps to provide supplies to them, and to this end, it has instructed public refueling stations to prepare adequate stocks," Pusponegoro added.

According to Pertamina Marketing and Commercial Director Ahmad Bambang, said his company would also release large stocks of non-PSO fuels to offer an alternative option in case the supplies of Premium and diesel fuel ran out as a result of the introduction of the new prices on April 1.

"We will start releasing non-PSO stocks from tomorrow, and keep the storage tanks full. So, if we run out of Premium stock when the price is announced, then alternative stocks will be available," the Pertamina marketing director explained.

Bambang expressed hope that the prices of non-PSO fuels such as Premium and diesel oil would not be drastically reduced as many have forecast the global oil prices to rebound in the coming several months.

"We propose that the prices (of subsidized fuels) should be lowered, but not too significantly, so that problems do not surface if they are not raised by next July. There is no problem if Pertamina suffers losses for the time being. It is the governments authority to decide. But, I see that the people want stability. It could be lowered or raised but not to a large extent," Bambang affirmed.

Pertamina hoped that the prices of Premium gasoline and diesel oil would remain stable in the coming three months.

With stability in fuel prices, Pertamina is optimistic that the prices of commodities would be stable in the face of the post-fasting Eid el-Fitr or Lebaran festivities this year.

"If the prices of fuels are slashed in the April-June period, we hope the government, as the regulator, would lower it by some Rp200 to Rp400 per liter for Premium and diesel oil," Bambang noted.

He remarked that the global oil prices, in the coming three months, would hover between US$40 and US$50 per barrel. The next adjustment in oil prices in July will be influenced by the fuel prices in the April-June period.

In July, this year, the people will observe the post-fasting month of Eid el-Fitr or the Lebaran festivities and the school holidays. Thus, while adjusting the oil prices, the government could take into account the peoples social conditions and not merely the economic aspects.

After all, over the past 10 days, the global oil price has begun to show an upward trend, now reaching US$41 per barrel. If the average price of fuel in the world market increases, the government might not be ready to change the price all of a sudden. So, it would be better if the prices now are not lowered too much, so that in July, there will be no need to raise them again," he explained.

The slashing of fuel prices to a significant level will not drive down the prices of goods, in general, but if they are hiked, they will adversely cause a surge in the prices of commodities.

"It is obviously indicated, so far, that if the prices of fuels go down, they are not automatically followed by a decline in the prices of basic necessities. Last January, for instance, the prices of fuels were significantly cut, but the prices of rice and meat adversely rose. In contrast, when the prices of fuels are increased, though only by Rp200 per liter, the prices of commodities increase and even cause inflation," he remarked

Expectations that the government would maintain the stability in fuel oil prices was also voiced by Dito Ganinduto, a member of Commission VII on energy affairs of the House of Representatives.

He said that although the crude oil prices had dropped significantly in the global market, the government should not lower the prices of fuel oil in accordance with this trend.

Ganinduto, who belongs to the Golkar Party faction, stated that the current oil prices in the world market hover around US$40 per barrel. The price is highly unreasonable as it is far below market expectations. Therefore, the government should evaluate all possibilities, including the likelihood of a hike in the global oil prices.

"What is important is that the prices set by the government, particularly of Premium and diesel oil, should remain within the reach of consumers," he emphasized.

The government had last adjusted the Premium gasoline and subsidized-diesel oil prices in January, which are effective until the end of March. Subsidized Premium prices were set at Rp6,950 per liter outside the Java-Madura-Bali areas and at Rp7,050 per liter in the Java-Madura-Bali regions. It set the price of subsidized diesel oil at Rp5,650 per liter.(*)

Reporter: Andi Abdussalam
Editor: Heru Purwanto
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