Government Considers Adjustment to Non-Subsidised Fuel Prices

The government is faced with a policy dilemma, and there is no truly comfortable option. The government is opening the possibility of adjusting the prices of non-subsidised fuels (BBM) as the calculation of global and domestic energy prices continues. Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia stated that the final decision will be taken after the evaluation process is complete. Following the Working Meeting of the Red and White Cabinet at the Presidential Palace in Jakarta on Wednesday (8/4), Bahlil explained that the adjustment will cover various types of BBM, from RON 92, 95, 98 to Dex diesel. “Regarding BBM RON 92, 95, 98, including Dex diesel, we will make adjustments after the calculation is finished. We are still conducting exercises now,” he said. He added that the government hopes the Indonesia Crude Price (ICP) will decrease to provide room for lighter pricing policies for the public. To date, the calculations are still being carried out together with Pertamina and private parties. Regarding the two Pertamina-owned vessels detained in the Strait of Hormuz area, the government is currently conducting intensive communication. He hopes that a two-week pause in conflict escalation can accelerate the resolution of the situation. From the crude oil import side, Indonesia’s dependence on the Middle East region is still considered limited. Bahlil revealed that crude imports through the Strait of Hormuz only range from 20% to 25% of total needs. “Crude alone is 20%-25%, and we are already able to get replacements from several countries like Angola, Africa, Nigeria, America, and several other countries. So we’re clear, safe,” he said. The government is also opening the possibility of diversifying energy sources to other countries, although no certainty has been given regarding potential imports from Russia. “Later if it happens, you’ll hear it yourself. I’m not an expert who can guess,” said Bahlil. On the other hand, he assured that LPG supplies are in safe condition. Bahlil stated that the critical period for LPG supplies has passed since early April. “Our LPG reserves capacity is already above 10 days. Soon our ships will arrive,” he said. “LPG has nothing to do with the Strait of Hormuz. Because we already take it from Australia, America and other countries,” Bahlil concluded.