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Private gas station inexplicably pulls cheap fuel after loophole allowed it to lower price

Coconuts Jakarta - September 5, 2022

What was briefly the cheapest fuel in the land has been pulled from circulation, as private gas station chain Vivo's Revo 89 variant is reportedly no longer available nationwide.

On Saturday, President Joko Widodo announced that the government is reducing fuel subsidies, resulting in the price hike of the 90 octane-rated fuel Pertalite from IDR7,650 (US$0.51) per liter to IDR10,000 (US$0.67) per liter.

Vivo, which has a relatively small presence in Indonesia compared to other private gas stations like those operated by Shell and BP, suddenly attracted long lines of motorists at its gas stations, who were filling up their vehicles with the Revo 89 fuel.

On the surface, the 89 octane-rated Revo 89 is a rung below Pertalite in fuel rating and thus fell outside the government's purview for price intervention for the latter. In fact, amid the Pertalite price hike, Vivo lowered its Revo 89 price from IDR9,290 (US$0.62) to IDR8,900 (US$0.60).

The Vivo business boom was short-lived. As of Sunday, Revo 89 was no longer sold at Vivo gas stations with barely any explanation.

This prompted accusations that the government had pressured Vivo into pulling Revo 89 from circulation. The Ministry of Energy and Mineral Resources today denied the accusations, and said that it will soon provide a clarification on the issue.

President Jokowi said the government opted to reduce energy subsidies as a last resort as growing demand had siphoned an increasing amount of funds from the state budget. For 2022, the Indonesian government has so far earmarked IDR502 trillion (US$33.7 billion) for energy subsidies, up from the IDR170 trillion (US$11.4 billion) it allocated at the start of the year.

Source: https://coconuts.co/jakarta/news/private-gas-station-inexplicably-pulls-cheap-fuel-after-loophole-allowed-it-to-lower-price