Jakarta, March 30 (Antara) - The government is likely to lower public transportation fares by about three percent following a cut in the prices of Premium gasoline, diesel oil and high octane fuels such as Pertamax, Pertamina Dex and Pertalite.
On Tuesday, Pertamina decided to slash the prices of Pertamax, Pertamina Dex and Pertalite with effect from March 30, 2016 while the government decided on Wednesday to cut the prices of Premium and diesel oil with effect from April 1, 2016.
Transportation Minister Ignasius Jonan said on Wednesday that his ministry will write to the regional governments asking them to lower transportation fares following the reduction in fuel oil prices.
Jonan said the cut in transportation fares could be three percent, depending on the type of fuels they consume. This will cover ferry services, trains, inter-city or inter-provincial buses and city transportation vehicles.
"We will formulate this soon and it will be regulated through a ministerial decree," Minister Jonan said after attending a limited cabinet meeting on adjustment of fuel oil prices in line with a decline in the world crude price.
However, Minister Jonan said public transportation fare should not necessarilty be reduced automatically with the cut in fuel oil prices.
During the cabinet meeting, President Joko Widodo (Jokowi) asked for lowering the transportation fares in line with the reduced fuel oil prices.
"It should not happen that public transportation fares, which rise as a result of an increase in the fuel oil prices, should not go down when these fuel prices are lowered," President Jokowi said while opening the cabinet limited meeting.
Any increase in fuel oil prices usually triggers a hike in the prices of commodities and services, including transportation fares, but when these are lowered, prices of commodities and transportation tariffs remain unchanged.
According to Pertamina Marketing and Commercial Director Ahmad Bambang, slashing fuel prices even to a significant level will not drive down the prices of goods, in general, but if these are hiked, it does adversely cause a surge in the prices of commodities.
"Last January, for instance, the prices of fuels were cut significantly, but the prices of rice and meat rose adversely. In contrast, when the prices of fuels are increased, though only by Rp200 per liter, the prices of commodities increased and even led to inflation," he remarked.
Therefore, President Jokowi instructed Transportation Minister Ignasius Jonan to ensure that public transportation tariffs are lowered after fuel oil prices are cut.
"This evening, we will discuss the issue of slashing fuel oil prices. I hope that once the prices are cut, the transportation minister would ensure the lowering of transportation fares," said President Jokowi while opening the limited meeting.
After a brief address at the meeting, the president asked Energy and Mineral Resources Minister Sudirman Said to deliver his report on the price of fuel oils.
The meeting was also attended by Finance Minister Bambang Brodjonegoro, Maritime Affairs Coordinating Minister Rizal Ramli, Pertamina President Director Dwi Sutjipto, Head of the Capital Investment Coordinating Board (BKPM) Hanky Sibarani, Minister & State Secretary Pratikno, Cabinet Secretary Pramono Anung, National Development Planning Minister Sofyan Djalil, Chief Economic Minister Darmin Nasution, Communications and Informatics Minister Rudiantara and Marine Affairs and Fisheries Minister Susi Pudjiastuti.
The limited meeting discussed fuel oil price adjustment, particularly prices of Premium gasoline and diesel oils.
On the occasion, the government has decided to reduce the prices of Premium gasoline and subsidized diesel fuel by Rp500 per liter with effect from 00:00 hours on April 1, 2016.
Energy and Mineral Resources Minister Sudirman Said announced the government's decision after attending a limited cabinet meeting on Premium and diesel fuels' price adjustment at the Presidential Office here on Wednesday.
"We decided to slash the Premium fuel's price from Rp6,950 per liter to Rp6,450 per liter and the diesel oil from Rp5,650 per liter to Rp5,150 per liter. We have not changed the price of kerosene," Minister Sudirman Said stated.
He said the government would periodically evaluate the fuel prices, both for Premium and diesel oil. Various factors would be taken into consideration during evaluation.
"We have been consistently evaluating the scenario every three months. This price has been decided after a review of the period of June and July when we will be facing the fasting month of Ramadan and the post-fasting Eid el-Fitr or Lebaran festivities," the minister said.
President Director of the state-owned oil company Pertamina, Dwi Soetjipto, said his company was ready to implement the government's decision and the new prices are expected to be maintained till September or the next six months.
Earlier, Pertamina also announced that it had reduced the prices of its Pertamax, Pertamax Plus, Pertamina Dex, and Pertalite types of fuels by Rp200 per liter, effective from March 30, 2016.
These fuels are non-subsidized or non-Public Service Obligation (PSO) oils whose prices were cut and came into effect earlier than the reduction in the prices of Premium gasoline and subsidized diesel fuels, which will also be lowered and become effective on April 1, 2016.
Pertamina's Vice President Corporate Communication Wianda Pusponegoro noted in a press statement on Tuesday that the prices of fuel oils were lowered in line with the decline in global crude oil prices.
"In mid-March, Pertamina had cut the prices of non-PSO fuels by Rp200 per liter and became effective on March 15. Now, it has reduced them again by Rp200 per liter, which came into effect as of midnight of March 30, 2016," she remarked.
Pusponegoro said with the decision to cut the prices of non-PSO fuels, the price of Pertamax in Jakarta was reduced from Rp7,750 per liter to Rp7,550 per liter, Pertalite from Rp7,300 per liter to Rp7,100 per liter, and Pertamax Plus from Rp8,650 per liter to Rp8,450 per liter.
The price of Pertamina Dex went down from Rp8,600 per liter to Rp8,400 per liter and that of non-subsidized bio-diesel from Rp7,150 per liter to Rp6,950 per liter, taking into account the conversion rate at the central bank (BI) on Wednesday at Rp13,296-Rp13,430 per US dollar.
"The Rp200 cut per liter is imposed on non-PSO fuels in all regions," Pusponegoro stated while referring to the disparity in fuel prices in different regions.***3***
(A014/INE/B003)EDITED BY INE(T.A014/B/BESSR/Bustanuddin) 30-03-2016 21:49: |
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