Jakarta – The government is considering increasing the prices of subsidized fuel next year because of the rising global oil prices. Previously, the government had said it would keep fuel prices unchanged until December 2018.
The government increased the Indonesian Crude Price (ICP) to US$59 per barrel in November from $54.02 per barrel in the previous month.
"If the price of crude oil reaches $60 per barrel, we may adjust [fuel prices]," said the Energy and Mineral Resources Ministry's Oil and Gas Director General Ego Syahrial in Jakarta, as reported by kontan.co.id on Wednesday.
Previously, the government had stated there would be no fuel price hike until late 2018, despite calls from state-owned energy firm Pertamina for an increase.
Ego said the government might, for example, be compelled to increase the price of Premium-branded gasoline to Rp 6,750 per liter from currently Rp 6,450 per liter. Subsidized diesel is currently priced at Rp 5,150 per liter.
"The current price is $58 or $59 per barrel. If the price exceeds $60 per barrel, we need to react. The price of Premium may be increased to Rp 6,750 per liter," Ego added.
Ego explained, however, that the government would try to maintain the current price by, for example, increasing cost efficiency at Pertamina. "But if we have to increase the fuel prices based on the formula, the government will not hesitate to increase the prices," he added. (bbn)