President Jokowi Instructs Energy Ministry to Ensure Premium Fuel Oil Supply and Price
Date 13 April 2018
President Joko Jokowi Widodo has instructed Ministry of Energy and Mineral Resources to ensure premium fuel oil supply around Indonesia. Therefore, the Ministry will review regulation about the obligation to ask the Government permission before raising fuel oil price of general type (other than karosene, gas oil, and gasoline). Presidential Regulation (Perpres) and Ministerial Regulation (Permen) required to implement it will soon be issued or revision of the regulation, Vice Minister Archandra Tahar stated in a press conference at the Ministrys office, Jakarta, on Monday (9/4) afternoon.
According to the Vice Minister, the bottom line of revised Perpres, that premium (designated areas special type of fuel oil) is not distributed only outside Java, Madura, and Bali Island, but also for the whole Unitary State of the Republic of Indonesia.
Archandra explained, this policy was adopted by the Government because premium in certain areas is in short supply. For that reason, the Presidents instruction is clear, to ensure premium supply.
In the mean time, fuel oil price which is set by the Government due to its relation to public necessities are diesel and kerosene. This fuel type is a subsidized fuel oil, meanwhile premium is a designated areas special type (premium outside Java and Bali Island).
Other than above mentioned fuel types, there is fuel oil general type, such as Pertalite, Pertamax series, and non-Pertamina gas station products, of which is priced by enterprises.
Complying with Presidents directive, according to Archandra, an increase in price of non-aviation and industrial fuel must consider inflation in the future. The Government very concerns about inflation rate caused by a rise in price of Pertalite, Pertamax, Pertamax Turbo fuel oil, therefore each general type fuel oil price rise must be in accordance with Constitutional Court decree, if there is an increase, it must first have a permission from the Government, Archandra Tahar stressed while adding, other than inflation, consumer purchasing power must also be considered.
Revised Regulations concerning the fuel policy implementation are, among others, Presidential Regulation Number 191 of 2014 on Supply, Distribution, and Retail Price of Fuel Oil and Ministerial Regulation Number 39 of 2014 on Retail Price Calculation of Fuel Oil.
The Vice Minister ensured, before the revision of Ministerial Regulations is promulgated, the Government will disseminate the rules both to the public and stakeholder in fuel oil sector so there will be no gap between the revised regulation and the fact on location. The Regulation become effective after it is signed and is not retroactive, Archandra stated.
Following this new policy, the Vice Minister must say, that the Government will indeed revise Regulation of the Minister of Energy and Mineral Resources Number 39 of 2014 on Retail Price Calculation of Fuel Oil which has regulated profit margin of 5-10%. Previously, the Government regulated the minimum margin of 5% and the high ceiling of 10%, then in the new policy the minimum is deleted, we set the high ceiling only, Secretary General of the Minister Ego Syahrial added (Humas Kementerian ESDM/ES) (EPI/YM/Naster)