Third Economic Policy Package: Prices of LPG, Pertamax, Pertalite and Diesel Fuels Decrease

Coordinating Minister for the Economy Darmin Nasution and several Working Cabinet Ministers after giving press statement (7/10)

Following the First Policy Package which was announced on 9 September and the Second Policy Package which was announced on 29 September, the Government officially announced the Third Economy Policy Package on Wednesday (7/10) afternoon. In the package, the Government lowers the prices of some oil and gas fuel, such as avtur, 12- kg LPG (Liquified Petroleum Gas), Pertamax and Pertalite. The new prices should take effect since 1 October 2015.

The price of Premium fuel is still at Rp 7,400/litre (applies in Jawa, Sumatra, Bali/Jamali) and Rp 7,300/litre in areas outside Jamali. However, the price of subsidized diesel fuel is decreased by Rp 200/litre, so the retail price now is Rp 6,700/litre.

“The prices shall apply in October to Desember 2015,” Coordinating Minister Darmin Nasution said in a press statement with several Working Cabinet Ministers, at the Presidential Office, on Wednesday (7/10) afternoon.

Regarding the price of gas for factory and new gas field, Darmin said that it would be set based on  purchasing power of fertilizer industry, which is USD 7/mmBtu. Meanwhile, gas price for other industries, for example petrochemicals and others, will be lowered based on the power of the industries themselves.

“The regulation on gas will take effect on 1 January 2016, because it needs a change on the regulation of non-tax state revenues (PNBP),” Darmin added.

The Coordinating Minister said that the price reduction will not affect the revenue of gas contracts (kontrak karya) company. “Costs that have to be cut are the PNBP and the distribution cost. Thus, please note  that this price reduction will not affect the revenue,” Darmin firmly said.

For electricity cost, the cost for customer group I3 and I4 will be reduced by Rp12-13 per kWh,  following the price reduction of fuel oil. Moreover, according to the Coordinating Minister, there is a 30% -price cut for midnight use from 11 PM to 08 AM.

The Government also gives delay in payment of electricity bills for labour-insentive (padat karya) and competitively weak industries up to 40% from the electricity bills on the first 6 or 10 months  and they can pay them by instalments. (DND/DNS/ES)(RAS/LW-Naster/Sy)