Pertamina President Director Says Pertalite's Economic Price Should be IDR 11,000 per liter, Pertamax IDR 14,500 per liter

JAKARTA - Pertamina President Director for the 2006-2009 period, Ari Soemarno, said that the government will not lower the price of subsidized fuel oil (BBM). The reason, the government is still considering several factors.

One of the factors is the weakening of the rupiah against the United States (US) dollar and the economic price of Pertalite.

"When it comes to (lowering the price) of Pertalite, there are 3 factors that influence, but the main factor is how much the government wants to subsidize because the price movement has been subsidized quite a lot", he said in Energy Corner, Monday, October 24.

He added that the economic price of Pertalite should now be at the level of IDR 11,000 per liter and Pertamax at the level of IDR 14,500 per liter.

"If the current price of Pertalite is far below the price of Pertamax, it means that the subsidy will be quite large for the economy because the economic price of Pertamax is IDR 14,500. The possibility in the future depends on the price of oil and the price of the rupiah exchange rate", he explained.

In terms of world oil prices, Ari continued, oil prices have declined compared to the last few months because the market tends to be pessimistic about demand which is still considered too low.

This condition causes OPEC to cut its daily production by 2 million barrels to increase the price of crude oil.

As a result, the price of oil, which previously reached the 80s per barrel, has increased to 90 dollars per barrel

"Why did they announce that? Because they feel pessimistic that demand will continue to fall and prices will continue to fall. And for OPEC the best benchmark is 90 because that is the price used in its state budget", Ari continued.

If until the end of 2023, there are no extraordinary events, the price of crude oil may still be above 90 dollars per barrel.

Taking into account these factors, Ari added, if energy is not a cheap commodity and asked people to learn to save money.

"The price movement is high because OPEC says it is reasonable, so we must learn not to expect fuel to go down", he concluded.