Fuel prices higher for industry in May as rupiah drops<\/p>\n
JAKARTA (JP): State oil and gas company Pertamina announced on
\nWednesday that it had raised May fuel prices for industrial users
\nby an average of 11 percent due to a drop in the rupiah against
\nthe U.S. dollar.<\/p>\n
Pertamina said in a statement that it increased the price for
\nautomotive diesel oil by 16.16 percent to Rp 1,150 (about 10.3
\nU.S. cents), from Rp 990; industrial diesel oil by 14.9 percent
\nto Rp 1,115, from Rp 970; kerosene by 7.8 percent to Rp 1,165,
\nfrom Rp 1,080; and bunker oil by 7 percent to Rp 825, from Rp
\n770.<\/p>\n
These prices are 50 percent of last month's average
\ninternational fuel prices, plus a 5 percent handling fee
\nsurcharge, Pertamina spokesman Ridwan Nyak Baik said.<\/p>\n
\"The cost of importing fuel will increase since the rupiah
\nfell against the U.S. dollar,\" Ridwan said.<\/p>\n
The rupiah was trading at around 10,000 against the U.S.
\ndollar in early April, before political tension knocked it down
\nto 11,000 at the end of the month.<\/p>\n
This week the local unit has experienced a slight recovery,
\nbut currency analysts suspect prevailing political uncertainties
\nto keep weighing on the rupiah.<\/p>\n
Pertamina began pegging its fuel prices for industries to
\ninternational prices in March under a government fuel subsidy
\nreduction program.<\/p>\n
The company sets the prices at 50 percent of the average
\nSingapore Mid Oil Platts oil prices for the previous month. It
\ncharges another five percent for handling fees.<\/p>\n
Foreign oil and gas, mining and shipping companies must pay
\nfuel prices at 100 percent of international levels.<\/p>\n
The price of fuel sold at gas stations remains unchanged,
\nhowever the government still plans to increase them in October.<\/p>\n
They initially planned a fuel price hike at gas stations for
\nApril but the move was delayed until October due to widespread
\ndissatisfaction among the public.<\/p>\n
Industrial users are not allowed to obtain their fuel supplies
\nfrom street gas stations. Instead, they should purchase fuel
\nthrough Pertamina's depots.<\/p>\n
The country's lavish consumption of subsidized fuel is seen as
\none of the main culprits contributing to the government's
\ndifficulties in controlling a tight budget.<\/p>\n
An expanding state budget deficit is forcing the government to
\ntighten expenditure, lest the deficit fall beyond the predicted
\n3.7 percent of Gross Domestic Production (GDP).<\/p>\n
The International Monetary Fund (IMF), which provides
\nIndonesia with loans to support the country's deficit, requires
\nthat the government gradually remove the fuel subsidy.<\/p>\n
This year, the government hopes to slash fuel subsidy spending
\nby Rp 4.3 trillion, as stipulated in the 2001 state budget. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/fuel-prices-higher-for-industry-in-may-as-rupiah-drops-1447893297",
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