Rising Fuel And Elpiji Prices Will Not Cause Indonesian Economic Turbulence

Illustration (Photo: Antara Doc)

JAKARTA - Economic and Energy Observer at Gadjah Mada University Fahmy Radhi assessed that Pertamina's decision to increase the price of non-subsidized fuel and LPG in line with rising world oil and gas prices would not cause economic turmoil and inflation.

"The proportion of Pertamax consumers and above is small and mostly middle to upper class. Usually the rich don't like turmoil," he said in a short message received in Jakarta, Monday.

Fahmy said that if the purpose of adjusting the price of non-subsidized fuel for the Pertamax Turbo and Dex Series types was according to economic prices, then the decision was right and very reasonable.

He also suggested that Pertamina could also lower the price of non-subsidized fuel if one day world oil prices fell.

"For Pertamina, the increase in non-subsidized fuel prices can improve cash inflow. Meanwhile, for the government it can decrease compensation funds," explained Fahmy.

As of July 10, 2022, the price of Pertamax Turbo, which previously only sold Rp. 14,500 per liter, has become Rp. 16,200 per liter, the price of Pertamina Dex which was originally only Rp. 13,700 per liter to Rp. 16,500 per liter, and the price of Dexlite from Rp. 12,950 per liter. liters rose to IDR 15,000 per liter.

Meanwhile, Bright Gas' non-subsidized LPG price also rose by around Rp. 2,000 per liter.

Pertamina Patra Niaga Corporate Secretary Irto Ginting claimed that despite the price adjustment policy, the price was still relatively competitive when compared to similar products sold by a number of fuel and LPG distribution companies in Indonesia.