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Vivo gas stations offer discount after Pertamina hikes prices

Jakarta Post - September 5, 2022

Wike D. Herlinda, Jakarta – At about the same time as the government decided on an increase in the price of Pertamina's subsidized fuels, private gas-station operator Vivo reduced the price of its Revvo 89 fuel to Rp 8,900 (US$0.60) per liter, well below Pertalite's Rp 10,000 per liter.

The RON-89 brand of fuel is now the cheapest gasoline in Indonesia, and the only one sold at a lower price than the subsidized Pertalite, which is a RON-90 fuel.

Local-media outlets have reported that the Energy and Mineral Resources Ministry had told Vivo to raise the price of Revvo 89 to match that of Pertalite.

While unconfirmed, the reports have caused uproar in social media, and an economist has claimed that such an order would violate the Antimonopoly Law.

Political Economy and Policy Studies (PEPS) managing director Anthony Budiawan said the government's alleged move was "senseless and harmful to people's finances".

"If [Pertalite's price of] Rp 10,000 per liter is still subsidized, the government should be happy that the people [are still able to] buy fuel from other [private] gas stations. [...] Ordering Vivo to increase prices, [is it] an indication that Pertamina wants to boost sales of Pertalite [for] big profit?" the economist queried via his Twitter account on Sunday.

He added that the government's reported order for Vivo to increase prices was "very dangerous" and could "violate the law prohibiting monopolistic practices and unfair business competition, including practices of collaboratively determining certain prices and price fixing".

The ministry and Pertamina have yet to release any official comments. However, the biggest state-controlled fuel retailer posted a statement on Sunday urging the public to use Pertamax, which is the firm's unsubsidized RON-92 fuel, instead of the subsidized Pertalite.

Irto Ginting, corporate secretary of Pertamina's commercial arm Pertamina Patra Niaga, said Pertamax remained the most competitive RON-92 fuel brand in the country, although its price had been gradually adjusted in accordance with the recent global oil-price trend.

"In the span from March to September this year, prices of RON-92 fuel were adjusted regularly by other [private] gas-station operators, but Pertamax's price was only adjusted once, in April," Irto claimed.

With the Indonesian Crude Price (IPC) still quite high at around US$94.17 per barrel last month, he continued, Pertamina Patra Niaga decided to set a new price for Pertamax, which took effect on Sept. 3.

Pertamax currently retails at Rp 14,500/liter in Greater Jakarta, with a 5 percent motor vehicle fuel tax (PBBKB) imposed on top of that. Prices in other regions differ.

"This price determination is in accordance with the regulation of ministerial decree No. 62/2020 concerning the formulation of prices for general fuel types," added Irto.

He said the company also took into account aspects of distribution and stocks when setting the price of the unsubsidized fuel.

"This displays Pertamina's commitment to ensuring national energy security. In terms of price, it is still the most competitive. So, people don't need to worry; and in the future, the price of Pertamax will continue to be evaluated according to the trend of world oil prices. This was already the case when Pertamina evaluated and lowered the prices of Pertamax Turbo, Dexlite and Pertamina Dex," he concluded.

Source: https://www.thejakartapost.com/business/2022/09/05/vivo-gas-stations-offer-discount-after-pertamina-hikes-prices.htm