Cabinet Secretary: Price Reduction on Fuel and Electricity to Announce Next Week

Cabinet Secretary responded to reporters questions, at the Presidential Office, Jakarta, on Thursday (1/10)

President’s notion on Pertamina to recalculating the price of fuel (BBM), particularly premium and diesel fuel, as well as recalculating the possibility to lower the price is being followed up.

Cabinet Secretary Pramono Anung said that State-owned electricity company (PT PLN)’s Managing Director Sofyan Basyir and State-owned oil and gas company (Pertamina)’s Managing Director Dwi Sutjipto were summoned by the President on Thursday (1/10). “President Joko Widodo asked PLN, Pertamina, Finance Minister and Coordinating Minister for the Economy to recalculate premium and diesel fuel oil (BBM), as well as industry electricity, “ Cabinet Secretary said to the reporters after a limited meeting at the Presidential Office, Jakarta, on Thursday (1/10).

Regarding the result of the meeting, Pramono Anung said to the reporters to wait for the result until next week.”We wait until next week, whether the calculation could be saved or not, to announce it,” Pramono said.

He mentioned the calculation on fuel is part of Policy Package which will be announced next week.

As previously reported, President Joko Widodo asked Pertamina to recalculate the price of BBM  which has been announced by the Energy and Mineral Resources Ministry’s Oil and Gas Director General, I Gusti Nyoman Wiratmaja Puja, on Wednesday (30/9). The price shall not change until January 2016.

“Let us recalculating it. Please calculate again if is possible to lower the price of premium even if it is just a little,” the President said when giving remarks in a limited meeting on permit cutting time on Thursday (1/10) afternoon, at the Presidential Office, Jakarta.

President Joko Widodo admitted that he knew that the price of BBM fuel oil which apply now is still (-2%) minus two percent from the economic price and it has been reported as well. “However it probably could be set lower,” the President said.

In a press statement at the office of Energy and Mineral Resources Ministry on Wednesday (30/9), I Nyoman said that there is no change in the price of BBM fuel oil due to the selling price is still below the economic price that makes PT Pertamina at loss.

We decided to keep the BBM fuel oil at the same price in order to maintain the stability and to make economic plan easier,” Wiratmaja said while mentioning that in the future the price of BBM fuel oil will be reviewed once in every three months or on 1 January 2016.

Until now, the price of premium fuel is Rp 7,300 and diesel fuel is Rp 6,900. Meanwhile, by considering the world average price of oil and current exchange rate of Rupiah to USD, as well as Mean of Platts Singapore (MOPS) in the last six months, the average price of premium fuel, per October 2015, should be Rp 8,300/litre and diesel fuel Rp 6,750/litre. (SLN/DID/UN/ES) (RAS/MMB/YM-Naster/Sy)