Indonesia raises fuel oil prices as of Sept. 3

The price of Pertalite type of fuel oil (Ron 90) which was previously 7,650 rupiahs/liter has been raised to 10,000 rupiahs/liter and the price of subsidized diesel oil which was previously 5,150 rupiahs per liter was increased to 6,800 rupiahs/liter.

Jakarta (Indonesia Window) – The price of Pertalite type of fuel oil (Ron 90) which was previously 7,650 rupiahs/liter has been raised to 10,000 rupiahs (about 0.67 U.S. dollars)/liter and the price of subsidized diesel oil which was previously 5,150 rupiahs (about 0.3 dollars) per liter was increased to 6,800 rupiahs (about 0.46 dollars)/liter.

In addition, the price of non-subsidized Pertamax fuel (Ron 92) has also undergone an adjustment from 12,500 rupiahs/liter to 14,500 rupiahs/ liter, Energy and Mineral Resources Minister Arifin Tasrif said after the official announcement of the fuel oil increase by President Joko Widodo (Jokowi) at the Merdeka Palace in Jakarta on Saturday.

The fuel price adjustment has been effective as of Sept. 3, 2022, the minister said, adding that this is valid for one hour since the announcement of this price adjustment, so it has taken into effect as of 2.30 p.m. local time, Arifin explained.

According to the president, the increase in the prices of subsidized fuel oil is aimed at making the subsidies provided by the government more effective.

“More than 70 percent of the subsidies are actually enjoyed by the have, namely owners of private cars. The state’s money should be prioritized to provide subsidies to the underprivileged,” the president said.

In the midst of soaring global prices, the Indonesian government has made efforts to reduce fuel prices so that they remain affordable for the public.

The fuel subsidies and compensation budget for 2022 has also tripled from 152.5 trillion rupiahs to 502.4 trillion rupiahs.

“Right now the government has to make a decision in a difficult situation. This is the government’s last option, which is to divert fuel subsidies, so that the prices of several types of fuel that have been subsidized so far will be adjusted,” he said.

With the transfer of this fuel subsidies, the government adds a social cushion for the people. First, direct cash assistance for fuel oil with a total value of 12.4 trillion rupiahs.

“The assistance is given to 20.65 million underprivileged families, amounting to 150,000 rupiahs per month per family, and starting in September for four months,” Jokowi noted.

The government also distributes salary/wage subsidy assistance with a budget allocation of 9.6 trillion rupiahs for 16 million workers.

“The government has also prepared a budget of 9.6 trillion rupiahs for 16 million workers with a maximum salary of 3.5 million rupiahs per month per person in the form of wage subsidy assistance, which is given in the amount of 600,000 rupiahs (per worker),” he said.

The head of state has also asked local governments to use two percent of the general transfer fund of 2.17 trillion rupiahs for public transportation assistance, online motorcycle taxi assistance, and for fishermen assistance.

“The government is committed that the use of subsidies which are people’s money must be right on target. Subsidies should be more beneficial for the poor,” he said.

*1 dolar AS = 14.892 rupiahs

Reporting by Indonesia Window