Pertamina hikes Pertamax, Pertamax Plus, Avgas prices
The Jakarta Post, Jakarta
Users of Pertamax and Pertamax Plus gasoline will have to dig deeper into their pockets as of Thursday, following state oil and gas firm PT Pertamina's decision to raise the prices of the two types of fuel.
Industries and airlines alike will also have to pay more for Premium gasoline and kerosene, as Pertamina also adjusted fuel prices for industrial use and the price of aviation fuel.
Pertamina announced in a statement on Wednesday that the new prices would come into effect on Sept. 1. In the announcement, the price of high-octane Pertamax will increase to Rp 5,700 (56 U.S. cents) per liter from the previous Rp 4,000 while the price of Pertamax Plus will increase from Rp 4,200 per liter to Rp 5,900.
However, the price of Pertamax DEX, Pertamina's high-grade diesel fuel, remains unchanged at Rp 6,300 a liter.
Pertamina last increased the prices of the unsubsidized fuels last December by as much as 60 percent.
"The decision to raise the prices was made on considerations that global oil prices have skyrocketed to record highs of late," Pertamina spokesman Mochamad Harun said.
Oil prices remained high as of Wednesday, closing at up to US$70.48 a barrel in New York and $68.05 in London for October delivery, as the market assessed the damage that Hurricane Katrina had caused to U.S. oil production facilities.
Harun further said that Pertamina has also raised the prices of Premium gasoline and kerosene for industries, according to the latest market prices.
The price of Premium fuel for industry was raised from Rp 4,640 to Rp 5,160 a liter, while the price of kerosene was raised from Rp 5,490 a liter to Rp 5,600.
The prices of diesel fuel and diesel oil decreased, however, due to a "slight oversupply despite recently soaring oil prices", Pertamina said. Pertamina adjusted downward the prices of diesel fuel and diesel oil to Rp 5,350 and Rp 5,130 a liter, respectively.
Since July, Pertamina has been applying the market price for diesel fuel for export-oriented companies, such as mining and oil entities, doubling it from the subsidized Rp 2,200 charged before, to ease pressure on the state budget.
The government is anxiously looking for ways to suppress the ballooning fuel subsidy, which is expected to exceed its Rp 76.5 trillion allocation in the revised 2005 state budget, should oil prices remain above $60 a barrel and without efforts to cut down consumption.
The application of market prices was then extended to power producers that do not sell output to state electricity firm PT PLN, industries located in bonded zones and companies that reallocate use from non-fuel to fuel.
Pertamina claims that it can save up to Rp 20 trillion of the fuel subsidy a year through the market price application.
Pertamina also raised the price of its avtur, by an average of 6 percent, according to the related airport. The avtur price at the Soekarno-Hatta International Airport depot, for example, was raised from Rp 5,038 a liter to Rp 5,357.