Pertamina cuts fuel prices for industry by 14.5% average

Alfian, The Jakarta Post, Jakarta | Sat, 11/15/2008 10:59 AM  

State oil and gas company PT Pertamina has cut the prices of fuels sold to industries by an average of 14.58 percent following a decline in global oil prices. 

Effective today, the price of gasoline for industries dropped 22 percent from the last price on Nov. 1. 

The price of kerosene was cut by 8.6 percent, industrial diesel oil by 7.2 percent, high speed diesel (HSD) by 8.8 percent, boiler diesel fuel (diesel V10) by 12.3 percent, and marine fuel oil (MFO) by 28.6 percent, the company said in a statement Friday. 

In Greater Jakarta, gasoline dropped to Rp 6,600 (57.39 U.S. cents) per liter, kerosene to Rp 7,409.82 (64.43 U.S. cents) per liter, diesel to Rp 6,951.41 (60.44 U.S. cents) per liter, HSD to Rp 6,473.72 (56.29 U.S. cents) per liter, Diesel V10 to Rp 5,879.72 (51.12 U.S. cents) per liter and MFO to Rp 4,022.59 (34.98 U.S. cents). 

All these prices include a 10 percent value-added tax and for Premium gasoline and diesel a 5 percent vehicle fuels tax. 

Pertamina said the price cuts were due to the decrease of Mid Oil Platts Singapore (MOPS) fuel prices by between 7.2 and 28.6 percent and the weakening of the rupiah by about 15 percent. 

The price cuts have narrowed the gap between the prices of non-subsidized fuels and those of subsidized fuels. 

The government subsidizes four types of fuels: Premium gasoline, diesel, kerosene and three-kilogram-canister LPG. The current subsidized prices are Rp 6,000 per liter for Premium gasoline, Rp 5,500 per liter for diesel and Rp 2,500 per liter for kerosene. 

Last week, the government decided to cut the price of subsidized Premium gasoline by Rp 500, or 8.3 percent, effective Dec. 1. The government said it would continue to adjust it monthly. 

Asked about the possibility that government might also reduce the price of subsidized diesel, Energy and Mineral Resources Ministry Purnomo Yusgiantoro said the ministry would continue to monitor all influential variables on prices. 

Purnomo said the government's decision on pricing of subsidized fuels was not only based on global crude oil prices, but also on the rate of the rupiah against the U.S dollar and the availability of the budgeted subsidy allocation. 

Subsidy spending has reached Rp. 136.6 trillion ($11.8 billion) as of November, higher than the initially allocated Rp 126.82 trillion.