JAKARTA - The world oil price has dropped due to the trade war between Russia and the United States. This condition is exacerbated by the outbreak of the corona virus or COVID-19 in various countries. As a result, the price of fuel oil (BBM) has dropped, but this is not the case in Indonesia.
The condition of the fuel price that has not fallen at a time when world oil prices are currently dropping is the concern of the House of Representatives (DPR). In a hearing (RDP) with the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif, commission VII members questioned changes to the general fuel price formula.
The chairman of Commission VII in charge of energy, Sugeng Suparwoto, argued that with the drop in oil prices and also the possibility of a world economic crisis due to the corona virus or COVID-19 outbreak, the price of fuel has the potential to be lowered. Therefore, the DPR and the Ministry of Energy and Mineral Resources will recalculate subsidized and non-subsidized fuel prices.
Sugeng explained, although the volatility of world oil prices is still high, until June 2020 the world oil price is projected to be at the level of 25 US dollars (US) per barrel for the WTI type, and 29 US dollars for the Brent type. The price range, according to him, is very far from the price set in this year's APBN, which is around US $ 62 per barrel.
Meanwhile, member of Commission VII DPR, Sartono Hutomo, questioned the price of fuel that had not gone down. In fact, Presidential Regulation No. 191/2014 states that the determination of the fuel price is adjusted to the world oil price.
For your information, the average price of Indonesian crude oil or ICP during March 2020 was recorded at 34.23 US dollars per barrel. On the other hand, world oil prices have continued to decline since the beginning of the year due to the outbreak of COVID-19, which weakened world oil demand.
The reason of the Minister of Energy and Mineral Resources
In response to this, Minister of Energy and Mineral Resources Arifin Tasrif said that the price of fuel has not decreased this month because the implementation of the retail sale price is still the same as April 2020. This decision was taken by considering various things. One of them, because world oil prices are still unstable and have high volatility, they have the potential to go down or rise again. Thus, the government continues to monitor developments in the price of these commodities.
In addition, said Arifin, the government is also waiting for the effect of cutting production of OPEC + (crude oil producing country) by around 9.7 million barrels per day in May-June and cutting by 7.7 million barrels per day in July-December, and 5, 8 million barrels per day in January 2021-April 2022.
Arifin also said that the price of general fuel types (JBU) had decreased twice in 2020 in January and February, with a significant reduction rate. In January, the price reduction ranged from IDR 300 to IDR 1,750 per liter. The decline occurred in gasoline products RON 92, RON 95, RON 98, and Diesel CN 48 and CN 51.
Then, continued Arifin, the decline also occurred in February with a value ranging from Rp. 50 to Rp. 300 per liter. At that time, price corrections occurred only for gasoline RON 92, RON 95 and RON 98.
"In February, there was a decrease because there were indications that the gasoline index was moving down," he said, in a virtual meeting with Commission VII, Monday, May 4.
Not only that, Arifin claims, the price of fuel in Indonesia is one of the cheapest in Southeast Asia (ASEAN). Not only in ASEAN but also compared to several countries in the world.
Fuel prices in the ASEAN region
Based on data from the Ministry of Energy and Mineral Resources, several fuel prices are cheaper than other countries in ASEAN, including for gasoline RON 95. Indonesia applies a price of IDR 9,650 per liter, while Singapore is IDR 21,317 per liter. Then, Malaysia provides a price of IDR 4,299 per liter, this is because the government provides subsidies for the use of RON 95 gasoline.
Then, Thailand applied a price of Rp. 11,302 per liter, Vietnam at Rp. 7,812 per liter, the Philippines at Rp. 12,532 per liter. For Laos, Myanmar and Cambodia, respectively, the price is Rp. 16,122, Rp. 4,506 and Rp. 9,850 per liter.
However, for the CN 51 Solar fuel type, Indonesia is not yet among the cheapest. Data per May 1, the price of CN 51 Solar in Indonesia ranges from IDR 9,850 to IDR 10,200 per liter. Meanwhile, Singapore amounted to IDR 17,450 per liter, then Malaysia IDR 4,815, Thailand IDR 9,793 per US dollar. There is also Vietnam, which provides prices ranging from Rp. 6,398 to Rp. 6,521.
In the Philippines, the price of CN 51 diesel fuel is traded at Rp.10,103 per US dollar. Meanwhile, Laos, Myanmar and Cambodia each provide price rates of Rp. 13,103, Rp. 4,610 and Rp. 9,850 per liter.
"For diesel fuel, we are indeed higher, but we have maintained the price for a long time when prices in other countries are much higher," he said.
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