Industrial fuel, Pertamax prices to fall
Industrial fuel, Pertamax prices to fall
Leony Aurora, The Jakarta Post, Jakarta
State oil and gas firm PT Pertamina plans to lower prices for
oil-based fuels consumed by industry, as well as high-octane
fuel, by between 5 percent and 10 percent in January as global
oil prices decline.
The prices of fuel set by Mid Oil Platts Singapore, used by
the company as a standard to determine local prices, had declined
similarly, Pertamina's head of fuel division Achmad Faisal said
on Tuesday.
"I don't know the exact figures, but the prices have
definitely dropped between 5 percent and 10 percent," Faisal
said.
Pertamina lowered prices for its high-octane Pertamax and
Pertamax Plus by Rp 300 (3 U.S. cents) per liter to Rp 5,400 a
liter and Rp 5,600 per liter respectively on Nov. 21.
National consumption of the premium-quality fuel has declined
to around 500 kiloliters (kl) per day this year, much lower than
last year's daily average consumption of 2,000 kl.
The drastic decrease was due particularly to the skyrocketing
retail price of the two fuels, which increased from Rp 2,450 per
liter of Pertamax to Rp 4,000 and from Rp 2,750 per liter of
Pertamax Plus to Rp 4,200 last December.
Most fuel types for industry -- which have been paying actual
market prices since July -- rose slightly in November. Kerosene
is being sold at Rp 6,480 a liter, diesel fuel at Rp 6,170 a
liter and gasoline at Rp 5,890 a liter.
After the government hiked fuel prices by an average of 126.6
percent in October, domestic consumption has continued to show a
decline. This may mean that next year's total demand for fuel may
decline to as low as 61 million kl from the previous estimate of
65 million kl, said Faisal.
"I think that the consumption of subsidized fuel will be lower
than the 41.5 million kl quota," said Faisal, referring to the
fuels that will receive subsidies as determined by the House of
Representatives.
However, if the government decided to lower prices, as global
prices declined, consumption might climb again, he added.
Industrial usage would stand at between 19.5 million kl and 25
million kl next year, said Faisal.
Forced to pay more expensive market prices for petroleum-based
fuel, many industries were trying to cut usage by replacing it
with cheaper fuel products like coal and gas, as well as
conducting efficiency measures.
Pertamina has said that subsidized fuel consumption would
reach only 55.6 million kl this year, lower than the set quota of
59.6 million kl, as the company required industries to pay market
prices.