Observer: Increased Motor Vehicle Fuel Tax Can Trigger Increase In Non-Subsidized Fuel Prices

Illustration. (Photo: Doc. Antara)

Energy economy observer at Gadjah Mada University (UGM) Fahmy Karyani said the increase in motor vehicle fuel tax (PBBKB) could have an impact on rising fuel prices for non-subsidized fuel oil (BBM) in DKI Jakarta.

"PBKB is included in the components that make up fuel prices, so that with an increase from 5 percent to 10 percent, of course it will have an impact on rising fuel prices," he said in his statement in Jakarta, quoted from Antara, Monday, January 29.

The DKI Jakarta Provincial Government has issued a new regulation regarding the amount of PBBKB. Through the Regional Regulation (Perda) of the Special Capital City Region of Jakarta Number 1 of 2024 concerning Regional Taxes and Regional Levy, the PBBKB tariff is set to increase to 10 percent from the previous 5 percent.

According to the regulation that has been in effect since January 5, 2024, specifically for the PBBB tariff for public vehicle fuels, it can be set at 50 percent lower than private vehicles.

According to Fahmy, the increase in motor vehicle fuel tax rates is also not appropriate to be applied in the current political year.

"I don't think this political year will be implemented widely, because it will have an impact on increasing inflation and then reducing purchasing power," he said.

He also assessed that the increase in PBBKB rates would not necessarily encourage people to switch to electric vehicles significantly. The reason is, many variables affect people to use electric vehicles.

"The decision to buy electric vehicles has many factors that affect it, not solely about price. If for example it is given a large amount of subsidies, it also does not encourage consumers to move and then move, because there are many variables such as the availability of infrastructure for electric vehicles, then also the availability of service after sales networks," explained Fahmy.