City authorities sets new retail price for kerosene

JAKARTA (JP): The city administration announced on Monday a maximum retail price for kerosene of Rp 430 (5 U.S. cents) per liter, an increase of about 25 percent.

Deputy Governor for Administrative Affairs Abdul Kahfi said the decision was made after a meeting with state-owned oil and gas company Pertamina, the Ministry of Energy and Mineral Resources and the Ministry of Industry and Trade earlier in the day.

"The price increase from Rp 345 to Rp 430 was set in observation of the current average percentage of fuel price hike and upon prior discussion with Pertamina," Kahfi told journalists after signing the gubernatorial decree on the price hike.

The authority for each provincial administration to set its retail kerosene price is regulated in Law No. 34/1999 on Jakarta Administration and Law No. 22/1999 on Regional Autonomy.

Gubernatorial Decree No. 2738, dated Oct. 2, 2000, stipulated that the price hike in the capital took effect immediately on Monday. Besides the price list set by Pertamina, the hike also considered transportation fees and profits for distributors.

Chairwoman of the City Economic Development Office Dameria Saragih said the maximum retail price was set for store owners who procure kerosene from 267 stations in the capital.

"We expect that the stores will only take profit around 5 percent from the retail price," she said.

Dameria said the consumer should be able to obtain the kerosene from all retailers at prices below Rp 570.

"We will be very strict, we will close and revoke permits of any stations that sell kerosene above the set price.

"We will also issue a decree instructing all mayors and district heads to supervise the price in their respective areas," Dameria said.

To control retail kerosene prices for consumers, the City Administration and Pertamina will effect market controls by injecting kerosene in the market as soon as there are signs of extraordinary price increases, she added.

"For the increase, we have to compare the local price with kerosene prices in West Java province because we could not have prices much higher than West Java areas to avoid unfair distribution.

"West Java may have set the price at Rp 435," Dameria said.

The central government announced the fuel hike on Saturday as the price for Premium gasoline increased to Rp 1,150 (11 U.S. cents) from Rp 1,000 per liter, automotive diesel fuel to Rp 600 from Rp 550 per liter, kerosene to Rp 350 from Rp 280, and bunker oil to Rp 400 from Rp 350 per liter.

To anticipate the hike, Pertamina prepared a month supply for the capital, or a total of 7,600 kiloliters of gasoline, which consists of premium gasoline, automotive diesel fuel, kerosene and bunker oil.

Pertamina spokesman Ramli Djaffar said earlier on Sunday that the company had prepared gasoline stock enough for the next 23 days and kerosene stock for the next 25 days in the capital.

"Pertamina has ensured us that the city will not suffer a kerosene shortage and they are ready to conduct market operations through direct supplies to local markets if necessary," Dameria said. (dja)