Questions on fuel prices should be posed to minister: President Jokowi
"Regarding the increase in the premium price, one should directly ask the minister," Jokowi, as the President is popularly addressed, said after a meeting with Dutch Prime Minister Mark Rutte at the MGM Grand Sanya Hotel, at midnight on Friday.
On the same occasion, Chief Economic Minister Sofyan Djalil said the increase of Rp500 per liter of gasoline premium had been decided by the government.
He added that the government had decided to lift the subsidy for premium gasoline, though it was still in place at Rp1000 per liter for diesel oil.
The Chief Economic Minister pointed out that fuel prices in Indonesia would be decided by the government, based on the decision of the Constitutional Court (MK). The government would decide prices based on the fuels economic viability.
"The announcement on the increase in the fuel oil prices has been made by the Director General of Oil and Gas at ESDM," Djalil explained.
He stated that given such a mechanism, the impact of fuel price increases on inflation would be very small.
Inflation is being targeted at 4 percent this year, he added.
The domestic consumption of gasoline and diesel oil in the transportation sector had dropped in recent weeks due to global economic pressures, according to state oil and gas company Pertamina.
"Fuel consumption has dropped in several other countries as well, despite the current low prices of oil," Vice President for Fuel Marketing of Pertamina, M. Iskandar, said in Jakarta on Wednesday.
The sale of premium gasoline and diesel oil at gasoline stations declined by 7 thousand kiloliters per day, he added.
In 2014, premium gasoline consumption had touched 29.63 million kiloliters, which was 81 thousand kiloliters per day, but it was currently pegged at 74 thousand kiloliters per day, he stated.
Moreover, diesel oil consumption had plummeted from 16.24 million kiloliters, or 44 thousand kiloliters per day, to 37 thousand kiloliters per day.
Iskandar further noted that premium gasoline consumption had also declined because many consumers had switched to using pertamax gasoline.
"As the prices of premium and pertamax gasoline are not very different, the consumption of pertamax gasoline has increased," he affirmed.
According to the Pertamina official, the sale of pertamax gasoline had risen to 7 thousand kiloliters per day from 2 thousand kiloliters per day.
Currently, premium gasoline was being sold at Rp6,900 per liter and pertamax gasoline for Rp8,600 per liter.
In addition, Iskandar pointed out that fuel consumption had slowed down during the last couple of years. "Premium gasoline consumption was currently growing by 3 percent, compared with 9 percent earlier," he added.
The Marketing Director of Pertamina, Ahmad Bambang, said the sale of non-subsidized diesel oil to state electricity company PT PLN had also dropped.
"Many PLN generators have switched to using gas and coal," he added.
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