The government will review the prices of subsidized fuels only in March 2017 after it decided not to raise the prices in December 2016, the Presidential Staff Office said in a statement released.
Although global crude prices have increased to more than US$50 per barrel, the government is trying to maintain the peoples purchasing power by keeping the prices of subsidized fuels unchanged, the statement read.
The policy to raise fuel prices is based on the results of a comprehensive study by observing Presidential Regulation No. 191/2014 on fuel supplies, distributions, and retail prices.
In addition, the policy is also based on Article 4 of Energy and Mineral Resources Ministers amended Regulation No. 39/2014 on the calculation of fuel retail price.
Under the regulation, the government sets the upper and lower price margins to decide fuel price hike.
The lower price is based on the basic price plus value added tax and motor vehicle fuel tax, with the lowest margin reaching 5 percent of the basic price.
The upper price is based on basic price plus value added tax and motor vehicle fuel tax, with the uppermost margin reaching 10 percent of the basic price.
The prices of non-subsidized fuels, including Pertamax, Pertamax Plus, Pertalite and Pertamina Dex, are set according to the market mechanism.
(Reported by Ade Irma Junida/Uu.S012/INE/KR-BSR/B003)
Editor: Priyambodo RH
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