World Oil Prices Soar, Sad News: Observer Says Pertamina Must Raise Fuel Prices

JAKARTA - Energy observer Inas Nasrullah Zubir believes that Pertamina should increase the price of fuel oil (BBM) so that it does not suffer large losses due to the spike in world oil prices.

"Yes, it has to be, because, since the last three months, Pertamina has been suspected of having suffered quite a large loss due to the sale of fuel", Inas said in Jakarta, quoted from Antara, Monday, June 7.

For this reason, according to him, the government will immediately act to adjust the new fuel price. The government must immediately determine the fuel price to adjust to the MOPS price in the last three months.

"Otherwise, Pertamina will suffer even more losses", said Inas, who is also a former member of Commission VII of the Indonesian House of Representatives (DPR) through a written statement.

Regarding Pertamina's losses, Inas gave the example of Pertamax, which was sold at the Java-Bali gas stations for IDR 9.000 per liter, in fact, the State-owned Enterprise (BUMN) had already lost IDR 1.810 per liter.

According to him, Pertamax's loss was based on the average price of Pertamax MOPS during February-April 2021 of 70.08 dollars/barrel. In this case, the average MOPS for Pertamax in February 2021 is USD 67.01, then March 2021 is USD 71.53, and April 2021 is USD 71.71. From the average MOPS, continued Inas, if the freight is 2 US dollars, then the landed Pertamax price is IDR 6.528 per liter.

In addition, he said, based on the Minister of Energy and Mineral Resources Regulation No. 62/2020, business entities can collect procurement fees, storage fees, and distribution costs for Pertamax of IDR 1.800 and a margin of 10 percent.

"Thus, the price of Pertamax before tax is IDR 9.160.80 per liter", said Inas.

Regarding taxes, he explained that the tax charged for each liter of fuel is 3 percent tax (PPh), 10 percent VAT, and 5 percent Application of Motor Vehicle Fuel Tax (PBBKB). Thus, when multiplied by the Pertamax price before tax, the figure is IDR 1.649. So, he continued, the price of Pertamax at gas stations should have been IDR 10.809.80 or rounded up to IDR 10.810 per liter.

As is known, world oil prices have skyrocketed since March 2021. Even in May 2021, oil prices were above USD 60 US dollars per barrel. WTI crude sold for USD 65 per barrel and Brent for USD 68 per barrel. In fact, the price of crude oil in June last year was still below 40 dollars per barrel.

For this reason, private gas station operators have raised fuel prices several times. Shell, for example, has raised prices twice, in early March and early April 2021. Only Pertamina has so far not raised fuel prices.

The policy of private gas stations to increase fuel prices several times is indeed possible. Because as is known, the price set by the government is only for subsidized fuel (diesel) and assigned fuel (premium). Meanwhile, other types of fuel are handed over to business entities. The Minister of Energy and Mineral Resources Decree No. 62 of 2020, for example, does allow all gas station operators to make price adjustments.