Energy Ministry Secretary General M. Teguh Pamuji informed newsmen that the provision was incorporated in Presidential Regulation Number 191 of 2014.
"Based on the presidential decree, each month, the government will determine the basic prices of all BBM, including Pertamax," he noted.
Earlier, the prices of non-subsidized RON 92, RON 95, and diesel oils were entirely under the authority of retail companies.
But, based on the presidential decision, the basic prices of the products would later be determined by the government and announced every month, while the companies would determine their retail prices, he remarked.
The components used to determine the basic price include procurement, distribution and warehousing cost, and margin for filling stations (SPBU).
He stated that the basic price is calculated based on the market price index and the rupiah exchange rate within a period from the 24th of the previous month until the 25th of the next month.
Besides the basic price, Teguh noted that the government will also determine the retail price formula for BBM for the general public, which is based on the basic price plus value-added tax, motor vehicle fuel tax (PBBKB), and margin for the business entity.
The PBBKB tax is determined by local governments at between five and 10 percent of the basic price while the margin is set by the business entity at minimally five percent and maximally 10 percent of the basic price.
The retail price of BBM for the general public is determined by the business entity as its marketing strategy is determined by the margin set by the companies.
"With the regulation, the price of BBM is set in accordance with the Supreme Court ruling Number 002 of 2003," he pointed out.
He said the government will also conduct checks to ensure that the retail price of fuel oils for the general public at filling stations complies with the presidential decree.
"We will reprimand, if the price violates the decree," he emphasized.
According to Presidential Decree Number 191 of 2014, the government has classified BBM into three categories.
The first category is oils for certain consumers with subsidy, such as kerosene and diesel oil.
Kerosene has been granted a floating subsidy, while diesel fuel has a fixed subsidy of Rp one thousand per liter.
The second category is for non-subsidized oils for certain areas such as premium (RON 89) fuel in regions outside Java, Madura, and Bali (Jamali) with an additional cost of distribution of two percent of their basic prices.
The downstream business regulator BPH Migas has been tasked with regulating their distribution.
The retail price of the two categories is determined by the government.
The third category is fuel oils for the general public outside the two categories.
The third category oils are not subsidized, and their retail price is determined by business entities.
The government limits the margin for the third-category oils at maximally 10 percent and minimally five percent.
The oils include premium sold in Java, Madura, and Bali and RON 92 gasoline.
He said the government sets the basic price for all types of fuel oils, and only the retail price is determined by companies.
Effective January 1, 2015, the retail prices for several types of BBM have been set by the government, with kerosene at Rp2.5 thousand per liter, diesel oil at Rp7.25 thousand, and premium in and outside Java, Madura, and Bali at Rp7.6 thousand.
The government will evaluate the prices once a month, he added.
(Reporting by Kelik Dewanto/Uu.H-YH/INE/KR-BSR/A014)
Editor: Priyambodo RH
Copyright © ANTARA 2015
