Rumours of subsidized fuel price hike gain strength

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Pertamina
Refuelling at a gas station. (Source: Pertamina)

Jakarta, IO – The signal of a subsidized fuel price hike in Indonesia continues to gain traction. President Joko Widodo and a number of ministers said the increase is because the state budget (APBN) is under a lot pressure and can no longer afford the bloated subsidies.

“I feel like we should be prepared, in case, let’s say, the fuel price hike does happen,” said Investment Minister/Investment Coordinating Board (BKPM) chief Bahlil Lahadalia, as reported by Kompas, Tuesday (30/8).

He even revealed that the subsidy burden is projected to swell to Rp600 trillion by the end of 2022 due to the spike in global energy prices.

House Committee VII deputy chairman Eddy Soeparno, who was interviewed by Reuters after a closed meeting between the House and state energy firm Pertamina earlier this week, said there may be 30-40 percent price spike if the policy is enacted.

If this happens Pertalite (RON90) gasoline will increase to Rp10,000 per liter from currently Rp7,650. Pertamax (RON92) gasoline will go up to Rp16,000 per liter from currently Rp12,500. And diesel fuel will shoot up to Rp7,200 per liter from the current price of Rp5,150.