Government maintains subsidised fuel prices to protect public purchasing power

Jakarta (ANTARA) - The government’s decision to maintain the price of subsidised fuels, namely Pertalite, Bio-Solar and 3-kilogram LPG, is the right step to protect public purchasing power and maintain national economic stability amid global economic pressures. The statement was made by the Secretary for Economic Policy of the Golkar Party Central Board, Abdul Rahman. “This policy demonstrates the government’s alignment with the broader public,” Abdul Rahman said in Jakarta on Sunday. The public transport and goods distribution sectors, which form the backbone of the economy, are still dominated by the use of subsidised fuel. The decision not to raise subsidised fuel prices is a precise move because it can maintain people’s purchasing power and hold back inflationary pressure, he said. He explained that the distribution of goods and services in Indonesia still mostly uses subsidised fuel, so the price adjustment for Pertamax will not have a significant impact on logistics costs or staple food prices. “Therefore, the impact of the Pertamax increase on inflation is relatively limited,” said the former lecturer at Hasanuddin University’s Faculty of Economics and Business. He assessed that the price increase for Pertamax, a non-subsidised fuel, needs to be addressed more wisely. The Pertamax price adjustment essentially follows the economic value of energy, including the impact of rising world crude oil prices or the Indonesian Crude Price (ICP), which is influenced by international geopolitical dynamics, including the conflict in the Strait of Hormuz region that has driven up global oil prices. “The Pertamax price increase is not an easy decision. The longer Pertamina holds the price adjustment below its economic value, the greater the financial burden that must be borne by Pertamina and the government,” he said. He noted that Pertamax consumers generally come from the upper-middle class, who have a greater ability to adjust their consumption patterns. Meanwhile, the Pertamax price adjustment essentially only requires its consumers to adjust their usage patterns. “Pertamax consumers generally have the ability to make such adjustments,” he said. He also stressed that the Pertamax increase will not have a significant effect on the national inflation rate because public transport and goods distribution still rely on subsidised fuel. “The Pertamax increase will not greatly impact inflation because public transport, both for passengers and goods, still uses subsidised fuel,” he added. He encouraged the government to continue ensuring the availability of subsidised fuel in all regions to prevent shortages or long queues that could disrupt public activities. “We also urge the government to continue ensuring that subsidised fuel supplies remain available and easily accessible to the public. Do not let shortages or queues occur that burden the people,” he said. He asked the government to strengthen various policy packages and economic incentives that can boost business activity and reinforce the purchasing power of the public, especially the middle class, which is the main engine of national economic growth. According to him, the government needs to continue expanding policy packages and economic incentives capable of driving public economic activity. “In this way, the purchasing power and economic activity of the middle class can be maintained amidst various global economic challenges,” he said.