Analyst Predicts Pertamax Price Drop in July

Energy economist from Gadjah Mada University (UGM) Fahmy Radhi estimates the price of non-subsidised fuel such as Pertamax will fall in July, responding to the decline in world oil prices. “Ideally, the price of Pertamax should be lowered at the beginning of July,” Fahmy said when contacted from Jakarta on Tuesday. Fahmy noted that world oil prices are now around the level of 80 US dollars per barrel, much lower after having surpassed the level of 100 US dollars per barrel at the peak of tensions between the United States (US)-Israel and Iran. At that time, he said, Iran closed the Strait of Hormuz, which resulted in a global oil scarcity. After tensions between Iran and the US eased, along with the reopening of the Strait of Hormuz, Fahmy said world oil prices began to fall as the scarcity problem started to be resolved. Nevertheless, Fahmy assessed that negotiations between Iran and the US remain dynamic, as the outcome of the talks does not yet guarantee peace. “So, there is still fluctuation, for who knows how long. But specifically for Indonesia, if the price of Pertamax is above the market price when evaluated, the government must lower it,” Fahmy added. Finance Minister Purbaya Yudhi Sadewa opined that the price of Pertamax fuel has the potential to decrease in line with the movement of world oil prices. Purbaya explained that the global economy has gained hope from the opening of peace opportunities between the US and Iran. If that peace is realised, Purbaya said, rupiah exchange rate stability is expected to improve, the cost of funds will become more competitive, and investment will continue to strengthen. The Ministry of Energy and Mineral Resources (ESDM) stated the government continues to secure alternative energy sources amid the ongoing negotiations between the US and Iran. Although the talks provide a positive signal to ease tensions in the Middle East and open up stability in world oil prices, ESDM Ministry Spokesperson Dwi Anggia considers the US-Iran relationship to remain dynamic. According to her, Indonesia must still anticipate various possibilities. “We must be optimistic, but anticipatory steps must also be taken,” Anggia said.