Government maintains subsidised fuel prices to protect public purchasing power
Jakarta (ANTARA) - The government’s decision to maintain the prices of subsidised Fuel (BBM), specifically Pertalite, Bio-Solar, and 3kg LPG, is an appropriate step in protecting public purchasing power and maintaining national economic stability amidst global economic pressures.
This statement was made by the Secretary of Economic Policy for the Golkar Party, Abdul Rahman. “This policy demonstrates the government’s commitment to the wider community,” Abdul Rahman said in Jakarta on Sunday.
The public transport and goods distribution sectors, which serve as the backbone of the economy, are still dominated by the use of subsidised fuel. The decision not to raise the price of subsidised fuel is a correct move as it can maintain public purchasing power and curb inflationary pressures, he said.
He explained that the distribution of goods and services in Indonesia mostly still utilises subsidised fuel, so any price adjustments to Pertamax will not have a significant impact on logistics costs or the price of basic necessities. He added that because the majority of distribution relies on subsidised fuel, the impact of Pertamax price increases on inflation remains relatively limited, according to the former lecturer from the Faculty of Economics and Business at Hasanuddin University.
He noted that the price increase for Pertamax, which is non-subsidised fuel, should be approached more wisely. The price adjustment for Pertamax essentially follows the economic value of energy, including the impact of rising global crude oil prices or the Indonesian Crude Price (ICP), which is influenced by international geopolitical dynamics, including conflicts in the Strait of Hormuz that drive up global oil prices.
“Increasing the price of Pertamax is not an easy decision. The longer Pertamina holds price adjustments below their economic value, the greater the financial burden that both Pertamina and the government must bear,” he said.
He mentioned that Pertamax consumers generally belong to the middle-to-upper class, who have a greater capacity to adjust their consumption patterns. Meanwhile, the price adjustment for Pertamax essentially only requires its consumers to adjust their usage patterns. “Pertamax consumers generally have the ability to make such adjustments,” he said.
He also emphasised that the increase in Pertamax will not have a significant impact on the national inflation rate because public transport and goods distribution still rely on subsidised fuel. “The increase in Pertamax will not significantly impact the rise in inflation because public transport, for both people and goods, still uses subsidised fuel,” he added.
He urged the government to continue ensuring the availability of subsidised fuel in all regions to prevent shortages or long queues that could disrupt community activities. “We also encourage the government to ensure that the supply of subsidised fuel remains available and easily accessible to the public. We must ensure that shortages or queues do not occur, which would instead burden the people,” he said.
He requested the government to strengthen various economic policy packages and incentives that can encourage business activities and strengthen the purchasing power of the public, particularly the middle class, which serves as the main engine of national economic growth. According to him, the government needs to continue expanding economic policy packages and incentives capable of driving community economic activity. “In this way, the purchasing power and economic activity of the middle class can continue to be maintained amidst various global economic challenges,” he said.