Celvin Moniaga Sipahutar, Anis Firmansah, Jakarta – Indonesia's government said subsidized fuel prices will remain unchanged despite a sharp increase in non-subsidized gasoline prices that has triggered long queues at gas stations and prompted motorists to switch to cheaper fuel.
Energy and Mineral Resources Minister Bahlil Lahadalia said the government would not raise prices for subsidized fuels, including Pertalite gasoline and 3-kilogram LPG canisters, following a steep increase in Pertamax prices this week.
"There will be no increase for subsidized fuel and subsidized LPG," Bahlil said on Wednesday during the national congress of the Indonesian Young Entrepreneurs Association (HIPMI) in Bandar Lampung.
Bahlil said President Prabowo Subianto had instructed the government to keep subsidies in place despite geopolitical tensions in the Middle East that have pushed up global energy prices.
"That is the president's directive. There will be no increase," he said.
State energy company PT Pertamina Patra Niaga raised the price of Pertamax, Indonesia's widely used RON 92 gasoline, from Rp 12,300 ($0.76) to Rp 16,250 per liter effective June 10. Pertamax Green 95 rose from Rp 12,900 to Rp 17,000 per liter, while Pertamax Turbo jumped from Rp 12,750 to Rp 20,750 per liter.
Subsidized fuel prices, however, remain unchanged, with Pertalite still sold at Rp 10,000 per liter and Biosolar diesel at Rp 6,800 per liter.
Pertamina Patra Niaga Corporate Secretary Roberth MV Dumatubun said the adjustment followed a government pricing formula for non-subsidized fuel products.
The sharp increase has already altered consumer behavior in several regions. In Gresik, East Java, motorists crowded Pertalite lines at multiple gas stations as many drivers abandoned Pertamax in favor of the cheaper subsidized alternative.
At a gas station in Manyar district, queues for Pertalite stretched onto nearby roads, while Pertamax pumps appeared significantly quieter than usual.
Imam, a motorcycle rider from Pongangan village, said he was shocked by the sudden increase.
"I usually buy Pertamax, but with prices this high I have no choice but to switch to Pertalite," he said. "As long as the motorcycle can run for work, I need the cheaper option."
At another station in Sukomulyo, Pertalite supplies reportedly ran out as demand surged following the price hike.
Lawmakers have warned the government to anticipate broader economic effects from higher fuel costs. Misbakhun, chairman of the House of Representatives' Commission XI overseeing financial affairs, said authorities should prepare measures to protect household purchasing power and contain inflationary pressures.
"We want to ensure what kind of stimulus the public may need," he told reporters on Wednesday.
The widening price gap between subsidized and non-subsidized fuel is expected to increase pressure on Indonesia's fuel subsidy budget, while raising concerns over supply strains as more middle-income consumers migrate to subsidized products.
Source: https://jakartaglobe.id/news/indonesia-holds-subsidized-fuel-prices-as-drivers-abandon-pertama