Erick Thohir: Fuel Doesn't Increase To Maintain People's Purchasing Power

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JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir said the decision not to increase the price of non-subsidized fuel oil (BBM) was aimed at maintaining people's stability and purchasing power.

Erick said that the increase in fuel prices could increase inflation, reducing people's purchasing power.

"Pertamina's decision not to increase fuel prices is certainly good for maintaining stability and people's purchasing power. Of course this can have a broad impact on the national economy," Erick said in a statement in Jakarta, Sunday, February 4.

Pertamina as a state-owned company is considered to have played a role in maintaining economic stability.

"Pertamina has also made efficiency in its business process so that it can produce fuel at the best price," said Erick.

Meanwhile, Energy observer at Gadjah Mada University (UGM) Fahmybulni said the government's decision not to raise all types of general or non-subsidized fuel and subsidized fuel was the right thing.

"The increase in subsidy prices will have an economic impact, namely inciting inflation, suppressing purchasing power is indeed not appropriate," said Fahmy.

Fahmy said that staying at the same fuel price will not burden the state's finances. This is because the government no longer compensates Pertamina when setting non-subsidized fuel prices below market prices.

"After it is decided that it is Pertamina's strategy, the burden will be reduced because the state no longer needs to provide compensation," said Fahmy.