Kerosene price to be controlled to prevent intolerable hikes

JAKARTA (JP): The city administration will enact on Wednesday a stringent regulation to prevent any intolerable hikes in the price of kerosene.

Head of the City Economic Development Office Dameria Saragih said on Tuesday the ruling will enforce a suspension of supply as a maximum punishment against any station which sells kerosene above the new retail price of Rp 430 (5 U.S. cents).

The regulation, a follow-up to the Gubernatorial Decree No. 2738 dated Oct. 2, 2000 on the new kerosene retail price, will be imposed on 267 kerosene stations across the capital.

"Station owners who violate the ruling will receive a warning letter issued by the National Federation of Oil and Natural Gas Entrepreneurs (Hiswana Migas). If the violation continues state oil company Pertamina will reduce the supply and finally stop it if the offense persists," Dameria said.

The city administration has also ordered all mayors and district heads to control all kerosene stations operating in their respective jurisdiction, she added.

"Before we set the new retail price, we had calculated the profit for the owners so there are no reasons for them to increase the price again," Dameria remarked.

She further emphasized that the city administration has also cooperated with Hiswana Migas and Pertamina in controlling the kerosene price and supply.

Commenting on the direct dropping operations conducted by Pertamina at two kerosene stations on Monday, Dameria said the move was initiated after certain traders tried to benefit from the absence of a decree on the new retail price.

"Yesterday (on Monday), some stations sold kerosene for between Rp 600 to Rp 700 per liter because when the new fuel price took effect we had not yet set the retail price for kerosene and Pertamina quickly anticipated that," she said.

Pertamina conducted a market operation in the Tambora and Palmerah areas in West Jakarta on Monday following an extraordinary hike in kerosene prices there.

Dameria said that to control retail kerosene pricing for consumers, the city administration and Pertamina will intervene in the market as soon as there are signs of irregular price increases.

The city administration will also decide on Wednesday the maximum increase in pricing for the nine basic needs in Jakarta.

"We will set the tolerable percentage of price hikes at around the 3 percent limit as stipulated by the Ministry of Trade and Industry," Dameria said.

These basic needs include rice, sugar, flour, eggs, meat and chicken.

She hinted that some of the nine basic staple foods will remain at their current prices, while others will be minimally increased.

"Based on our market observations, there have been no signs of increase in the prices of the nine basic needs," Dameria said.

Attending the meeting are officials from the City Administration Office, the Ministry of Trade and Industry and the Indonesian Chambers of Commerce and Industry as well as the big distributors of essential products. (dja)