Fuel price cut to remain for six months

JAKARTA. The government will maintain the new price of subsidized fuel for the next six months amid a global trend toward price increases, an energy official has said.

The government announced on Wednesday that it would cut subsidized fuel prices by Rp 500 (4 US cents) per liter, starting April 1, with an expected concomitant 3% reduction in public transportation fares.

“The Rp 500 per liter cut in Premium gasoline and diesel prices takes into account the trend in oil prices throughout the next six months,” Energy and Mineral Resources Ministry director general of oil and gas IGN Wiratmaja Puja told Thejakartapost.com on Thursday.

The decision, he added, ensures there will be no fluctuation in fuel prices during the fasting month and Idul Fitri holiday in June and July. “Global oil prices are projected to rise over the next six months, but we will maintain the price until Sept. 30," he said.

The government will cut the price of subsidized Premium gasoline from Rp 6.950 per liter to Rp 6.450, down by Rp 500. Similarly, subsidized diesel will drop from Rp 5.650 per liter to Rp 5.150. Kerosene remains at Rp 2.500 per liter.

The fuel price cut follows a three-month low in global oil prices, Wiratmaja added, while the rupiah has over the same period strengthened against the US dollar.

As of Wednesday, the price of West Texas Intermediate (WTI) stood at US$ 38,84 per barrel, down 20,2% year-on-year (yoy), while Brent reached US$ 39,32 per barrel, slumping 30,1% yoy. "Regarding the upward trend, the ministry projects global oil prices to rise until 2019, though not sharply," Wiratmaja went on.

State-owned energy company Pertamina has  cut subsidized gasoline and diesel prices by Rp 200 per liter from 12 a.m. today, the second price cut this month, with total cuts reaching Rp 400 per liter. (Ayomi Amindoni)