Government to Maintain Fuel Prices During 2009
Erwida Maulia , THE JAKARTA POST , JAKARTA | Tue, 02/03/2009 10:23 AM | Business
The government will likely maintain the latest prices of Premium gasoline, diesel and kerosene until the end of 2009, the president says.
President Susilo Bambang Yudhoyono said on Monday that the current prices are “appropriate” and “in accordance” with the projected movement of global crude oil prices and with the composition of the 2009 state budget.
“At market levels, the prices of Premium tend to rise above Rp 4,000 per liter; diesel tends to decline from Rp 5,000 per liter, and kerosene tends to stay at Rp 5,000 per liter.
“Given these conditions, the government will continue subsidies for diesel and kerosene,” Yudhoyono said, addressing a press conference after a Cabinet meeting at the Presidential Palace. Given the low price, Premium is no longer subsidized.
The government has predicted, based on the analysis of the movement of global crude oil prices, that the Indonesian Crude Price (ICP) would range between US$40 and $60 per barrel during 2009.
It will therefore maintain domestic prices of Premium gasoline at Rp 4,500 (36 US cents) per liter, diesel at Rp 4,500 per liter and kerosene at Rp 2,500 per liter, as set on Jan. 15.
Coordinating Minister for the Economy Sri Mulyani Indrawati said the government’s decision to maintain the current level of fuel prices was based on forecast trends in global oil prices up until the end of 2009, as well as recent trends during the second half of 2008.
“You can also see that fuel prices are not solely determined by the international market, but there are also currency fluctuations.
“By taking all things, including the price trend in January and over the next 11 months, into consideration, the president thinks the prices set on Jan. 15 are already appropriate,” explained Mulyani.
The president also said, citing a report from Transportation Minister Jusman Syafii Djamal, that the fuel price cuts over the past four months had resulted in a cut in public transportation fares by between 10 and 20 percent across a number of regions.
The government has cut the fuel price three times in the past few months following falls in global crude oil prices.
The government policy changes have been exploited to boost Yudhoyono’s popularity ahead of the July presidential election, so as to claim credit for what could be attributed to the impact of the economic downturn in developed economies.
An official at the Transportation Ministry, who asked not to be named, told The Jakarta Post that transportation fare cuts had been implemented in respect of commuter train services for Greater Jakarta and for ferry services out of or into Java island.
Fare cuts had not yet been implemented in public transportation services in provincial cities, where much depended on the policies of local mayors or regents.
Yudhoyono said that with the cut in fuel prices and the industrial electricity tariff, commodity prices, especially for basic necessities, were expected to decline.
Mulyani said this declining trend in commodity prices were expected to continue at least until February
The government will likely maintain the latest prices of Premium gasoline, diesel and kerosene until the end of 2009, the president says.
President Susilo Bambang Yudhoyono said on Monday that the current prices are “appropriate” and “in accordance” with the projected movement of global crude oil prices and with the composition of the 2009 state budget.
“At market levels, the prices of Premium tend to rise above Rp 4,000 per liter; diesel tends to decline from Rp 5,000 per liter, and kerosene tends to stay at Rp 5,000 per liter.
“Given these conditions, the government will continue subsidies for diesel and kerosene,” Yudhoyono said, addressing a press conference after a Cabinet meeting at the Presidential Palace. Given the low price, Premium is no longer subsidized.
The government has predicted, based on the analysis of the movement of global crude oil prices, that the Indonesian Crude Price (ICP) would range between US$40 and $60 per barrel during 2009.
It will therefore maintain domestic prices of Premium gasoline at Rp 4,500 (36 US cents) per liter, diesel at Rp 4,500 per liter and kerosene at Rp 2,500 per liter, as set on Jan. 15.
Coordinating Minister for the Economy Sri Mulyani Indrawati said the government’s decision to maintain the current level of fuel prices was based on forecast trends in global oil prices up until the end of 2009, as well as recent trends during the second half of 2008.
“You can also see that fuel prices are not solely determined by the international market, but there are also currency fluctuations.
“By taking all things, including the price trend in January and over the next 11 months, into consideration, the president thinks the prices set on Jan. 15 are already appropriate,” explained Mulyani.
The president also said, citing a report from Transportation Minister Jusman Syafii Djamal, that the fuel price cuts over the past four months had resulted in a cut in public transportation fares by between 10 and 20 percent across a number of regions.
The government has cut the fuel price three times in the past few months following falls in global crude oil prices.
The government policy changes have been exploited to boost Yudhoyono’s popularity ahead of the July presidential election, so as to claim credit for what could be attributed to the impact of the economic downturn in developed economies.
An official at the Transportation Ministry, who asked not to be named, told The Jakarta Post that transportation fare cuts had been implemented in respect of commuter train services for Greater Jakarta and for ferry services out of or into Java island.
Fare cuts had not yet been implemented in public transportation services in provincial cities, where much depended on the policies of local mayors or regents.
Yudhoyono said that with the cut in fuel prices and the industrial electricity tariff, commodity prices, especially for basic necessities, were expected to decline.
Mulyani said this declining trend in commodity prices were expected to continue at least until February
