JAKARTA (Reuters) – Senior Indonesian minister Luhut Pandjaitan said on Friday prices of 90-octane gasoline and subsidised liquefied petroleum gas in 3-kg cannisters may be increased to reflect higher global energy prices, news sites Detik and Kompas reported.
The reports come as state energy firm Pertamina lifted price of 92-octane gasoline Pertamax by 39% to around 12,500 rupiah ($0.8702) per litre starting Friday, after a jump in crude oil prices due to the war in Ukraine.
Luhut said following the increase in Pertamax, the price of Pertamina’s 90-octane gasoline known as Pertalite could be raised, followed by LPG in 3-kg cannisters, the reports said.
“We will do this gradually. The 3-kg gas price hasn’t been increased since 2007. I think that isn’t fair,” he added.
A spokesperson for Luhut confirmed that the minister had made the comments.
Luhut was cited as saying the government might look at July through to September for the increase in prices of the fuels.
Indonesia’s inflation rate hit a two-year high in March, official data showed on Friday, as economists warned prices would creep up further as the government raised gasoline prices and the value-added tax rate.
Pertamina on Friday kept the price of Pertalite unchanged at 7,650 rupiah per litre, but said price adjustments for Pertamax were “unavoidable” after the Indonesia Crude Price (ICP) rose to $114.55 per barrel as of March 24, up from $73.36 in December.
Pertalite is designated as a “special assignment” fuel, which means the government pays Pertamina compensation for these fuels if it incurs losses when global oil prices rise.
Indonesia scrapped gasoline subsidies in 2015, but authorities have continued to regulate retail prices for Pertalite and 88-octane gasoline.
Pertamina said the subsidised fuel, including Pertalite, make up around 83% of its sales.
($1 = 14,365.0000 rupiah)
(Reporting by Bernadette Christina Munthe, Fransiska Nangoy; Editing by Ed Davies)
