Our fuel prices are the cheapest in the region.
Jakarta (ANTARA) - Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan has asked his team to prepare a model to review the increase in the inflation rate due to rising fuel prices, although it is still under control.

Speaking at a public lecture at Hasanuddin University, Makassar, South Sulawesi Province, which was followed online from here on Friday, he said that Indonesia has been quite good at controlling the inflation rate.

According to Statistics Indonesia’s data, the country recorded an inflation of 4.94 percent year-on-year (yoy) in July 2022. The figure was still lower compared to other countries and regions, such as the United States (8.5 percent), the European Union (8.9 percent), and Turkey (79.6 percent).

However, Indonesia’s inflation rate exceeded the government’s target of three percent yoy.

The coordinating minister noted that the change in the inflation rate will depend on the adjustment in the prices of diesel and Pertalite fuels, which are still being subsidized by the government.

Hence, he signaled that perhaps President Joko Widodo (Jokowi) will announce an adjustment in fuel prices in the upcoming week to reduce the government’s subsidy burden, which has reached Rp502 trillion (US$33.8 billion).

"Our fuel prices are the cheapest in the region. They are far cheaper than (fuel prices in) other (countries) and they burden our state budget too much," he remarked.

Hence, Pandjaitan asked the public to be prepared if fuel prices are increased.

"Because, we cannot maintain them (the prices) that way after all. To reduce the pressure on us (our state budget) due to the rising price of crude oil, we must be prepared," he emphasized.

In addition to adjusting the fuel prices, the government may also carry out a number of other strategies to reduce subsidies, including reducing the consumption of fossil fuels by encouraging the use of electric vehicles as well as developing B40, which contains 40 percent biofuel made from palm oil and 60 percent diesel, the minister informed.

Earlier, President Widodo had indicated that the government cannot continue to maintain the current prices of diesel and Pertalite.

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Translator: Ade Junida, Uyu Liman
Editor: Rahmad Nasution
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