Pertamax, fuel for industry prices down

Leony Aurora, The Jakarta Post, Jakarta

Citing lower oil prices in the global market, state oil and gas firm PT Pertamina will cut prices of high-octane premium gasoline and fuel for industry by up to 7.7 percent next month.

Prices of the company's unsubsidized premium gasoline Pertamax Plus and Pertamax will be slashed by Rp 400 (4 U.S. cents) to Rp 5,200 per liter and Rp 5,000 a liter, respectively, Pertamina's fuel division head Achmad Faisal said on Thursday.

"The prices will take effect on Jan. 1," said Faisal.

The state firm also cut prices for fuel used by industry, with premium gasoline seeing the biggest decline to Rp 4,780 per liter, only 6 percent higher than the price of subsidized gasoline sold for motorists, from Rp 5,180 in the previous month.

For the first time since applying market prices for the sector in July, Pertamina will set different prices for fuel used for transportation and production purposes in January.

"The Ministry of Finance has requested that all fuel for transportation be subject to 5 percent tax, including sea transportation, which was not taxed previously," said Faisal.

Pertamina uses prices set at the Mid Oil Platts Singapore (MOPS) as a benchmark, adding a premium of 15 percent to cover the cost of transportation and distribution and a profit margin and another 10 percent in value-added tax.

Industries will pay Rp 4,980 for a liter of diesel fuel used for manufacturing or power generation purposes and Rp 5,180 a liter for transportation in January. Pertamina sold diesel fuel at Rp 5,340 a liter this month.