MPR Deputy Speaker Highlights Subsidised Fuel Migration as Price Gap Widens

The People’s Consultative Assembly (MPR) has highlighted a phenomenon of consumer migration from non-subsidised Pertamax fuel to subsidised Pertalite. This shift is considered a result of the very high selling price disparity.

Deputy Speaker of the MPR Eddy Soeparno explained that this consumption shift has led to a drastic increase in distribution at petrol stations. He noted that queues of vehicles are beginning to appear in various regions as a direct impact of the surge in demand for subsidised fuel.

“Today, if we look, there is a massive migration from Pertamax to Pertalite because of the significant price disparity. Therefore, the distribution workload has increased tremendously,” he said during a CNBC Indonesia Coffee Morning event on Thursday.

In his records, the surge in global crude oil prices, with Brent now touching US$96 per barrel, is the main trigger for the price adjustment of non-subsidised fuel products. He estimates that ongoing geopolitical instability in the Middle East will continue to push world oil prices, potentially reaching triple digits.

“Today Brent is already at US$96. We cannot hold back when crude oil prices soar like this, so Pertamax prices inevitably have to be adjusted,” he added.

The price gap between subsidised and non-subsidised fuel is now considered very stark. The government still maintains the price of Pertalite at Rp 10,000 per litre, whereas its economic value has reportedly reached Rp 16,100 per litre based on market calculations. “We buy Pertalite for Rp 10,000 everywhere. Just imagine the difference,” he stressed.