Fuel prices for industry to go up 15% for August
Fuel prices for industry to go up 15% for August
Leony Aurora, The Jakarta Post, Jakarta
Coal and oil companies have question the formula used to
calculate fuel prices applied to the mining sector, as state oil
and gas firm Pertamina has raised prices by more than 15 percent
for August deliveries.
Indonesian Mining Association chairman Jeffry Mulyono said
that the hike was more than expected and the association wished
to observe the pricing structure.
"Pertamina is not transparent in explaining the increased
prices," Jeffry, who also chairs the Indonesian Coal Mining
Association, told The Jakarta Post on Tuesday.
The organizations will officially file questions regarding the
fuel prices to the oil firm, he added.
Pertamina raised the price of diesel fuel to be used by oil
and gas companies, the mining sector, as well as companies with a
monthly usage of more than 500 kiloliters of fuel, by 15.6
percent to Rp 5,480 (56 U.S. cents) a liter from Rp 4,740 per
liter for July deliveries.
The price of marine diesel fuel increased by 15 percent to Rp
5,240 per liter this month from Rp 4,560 a liter last month,
while fuel oil rose to Rp 3,150 a liter from Rp 2,900.
Pertamina head of fuel division Achmad Faisal said that the
new prices were based on the average prices of the Mid Oil Platts
Singapore (MOPS) in the month previous to delivery.
"The formula is MOPS plus 15 percent, which covers
transportation and distribution fees, and 10 percent in value-
added tax," said Faisal.
He further said that the prices applied for August reflected
the higher MOPS prices.
"If you look at it daily, the price may not seem to rise as
much (as 15 percent) in the previous month," said Faisal.
"However, if you average them in a month, it did rise."
Global crude oil prices hovered at $60 per barrel last month,
rising to over $61 on Monday after the death of Saudi Arabian
King Fahd and problems at a BP refinery in the U.S.
Pertamina, with government permission, has applied market
prices for diesel fuel for export-oriented companies since July
to ease subsidy pressure on the state budget.
Diesel fuel prices more than doubled from the subsidized Rp
2,200 charged before.
Pertamina has extended the application of market prices this
month to Indonesian power producers that do not sell their output
to state electricity firm PLN, manufacturers located in bonded
zones and companies that switched from non-fuel products to fuel.
The prices are also effective for any additional allocation
for companies with fuel demand of over 24 kl per month. The fuel
allocations are based on the average monthly usage in the
previous three months.
Major coal players have said that due to the new policy,
production costs had increased by between $2 and $3 a ton.
However, as global prices of the commodity stay strong, they have
accepted the price hike.
Jeffry said that with the August prices, costs would climb by
another 75 cents per ton. "Fuel now attributes 25 percent of
total costs from about 18 percent previously," he said.
Domestic Fuel Prices for Industry
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No. Fuel Type Market Price Market Price
per July (Rp/liter) per Aug. (Rp/liter)
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1. Premium gasoline 4,060 4,640
2. Kerosene 4,940 5,490
3. High speed diesel 4,740 5,480
4. Marine diesel fuel 4,560 5,240
5. Marine fuel oil 2,900 3,150
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Source: PT Pertamina