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Good news to start the year: BBM price decreases

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  • Good news to start the year: BBM price decreases

    [COLOR=#000000][FONT=Arial]Pemerintah mengumumkan tidak lagi memberikan subsidi untuk Bahan Bakar Minyak (BBM) jenis RON 88 alias Premium. Mulai hari ini, harga Premium mengikuti mekanisme pasar dan harga turun dari Rp 8.500/liter menjadi Rp 7.600/liter.
    [COLOR=#000000][FONT=Arial]Sudirman Said, Menteri ESDM, mengatakan perubahan harga Premium tidak lepas dari harga minyak yang juga terkoreksi. Dalam perhitungan pemerintah, harga Premium yang Rp 7.600/liter sudah sesuai dengan kondisi saat ini.[/FONT][/COLOR]

    [COLOR=#000000][FONT=Arial]"Harga Premium Rp 7.600/liter itu berdasarkan ICP (harga minyak Indonesia) US$ 60/barel dan kurs Rp 12.300/US$," kata Sudirman kala ditemui di kantor Kemenko Perekonomian, Jakarta, Rabu (31/12/2014).[/FONT][/COLOR]

    [COLOR=#000000][FONT=Arial]Selain menghapus subsidi Premium, pemerintah juga mengubah pola subsidi untuk BBM diesel alias Solar. Mulai 1 Januari 2015, pemerintah memberi subsidi tetap ([/FONT][/COLOR]fixed subsidy[COLOR=#000000][FONT=Arial]) kepada Solar sebesar Rp 1.000/liter dan sisanya mengikuti mekanisme pasar.[/FONT][/COLOR]

    [COLOR=#000000][FONT=Arial]Melalui 2 kebijakan ini, maka harga Premium dan Solar akan naik-turun tergantung harga pasar atau keekonomian. Oleh karena itu, setiap awal bulan pemerintah akan mengumumkan harga dasar BBM.[/FONT][/COLOR]

    [COLOR=#000000][FONT=Arial]"Pemerintah, dalam hal ini Kementerian ESDM, akan mengeluarkan harga dasar BBM. Ini dilakukan setiap awal bulan," kata Sudirman.[/FONT][/COLOR]

    [COLOR=#000000][FONT=Arial]Harga dasar adalah satu dari beberapa komponen untuk menentukan harga jual BBM ke konsumen. Selain harga dasar, ada pula pajak-pajak dan biaya distribusi.[/FONT][/COLOR]

    [COLOR=#000000][FONT=Arial]"Walau tanpa subsidi, pemerintah tetap menetapkan harga BBM. Jadi tidak melanggar putusan MK," ujar Sudirman.[/FONT][/COLOR][COLOR=#000000][FONT=Arial]

    If you read the press today you may find similar article detailing the recent move from the government. Basically it says that the price of diesel will continue to be subsidized to a level of IDR 1.000 per liter, in order to boost economic activities, while the subsidy for RON 88 (what we call "premium") is revoked in totality and the price will in the future be conditioned by the market price for oil and dollar exchange rate.

    It means that starting today (January 1st, 2015) the new price for Premium is set at IDR 7.600 while subsidized diesel will be charged IDR 7.250 per liter. It also implies that with the new decision and plan concerning subsidies, the BBM price could change every month depending on both the Indonesian Crude oil Price and the rate of USD. At the moment, the prices have been set with the assumption that the ICP index is at USD 60 per barrel with a rate of exchange of IDR 12.300 for a dollar.

    For the record the ICP is calculated daily by Pertamina, based on a panel of different crudes, not only the Indonesian one.
    Last edited by atlantis; 01-01-15, 16:40.

  • #2
    I think this is going way over the heads of most people. I think the government was quite smart in ending the subsidies now with a combination of favorable market price and people being distracted by the new year.

    I really wonder what will happen when the international price of petrol goes up again, as it certainly will, and the price of premium at the pump goes back higher than 8000rp per liter with steady monthly increases onwards.


    • #3
      I think this idea makes sense, but could lead to some problems in a country like Indonesia.

      Some opportunists would raise their prices even if a fuel price rise was rumored, never mind actually happen. Which had a knock on effect. And of course when fuel prices go back down again they NEVER decrease their prices. When I mention this to them in jest they just give that smile and say nothing.

      I can see at the beginning of every month when there is a SLIGHT fuel rise these people adding an extra ribu to their prices


      • #4
        It all depends on how competitive the market is. In some places there is no competition, in others, much more.


        • #5
          I can't really see that it is the culture for sellers to really keep prices down to attract customers. Seems more like seller x has raised his prices so I can do the same.

          Apologies in advance as I seem to be going through a trough in the love hate Indonesia cycle at the moment. And I also concede that I may not be buying goods in the kind of situation where people are really trying to keep prices down


          • #6
            LPG Price To Rise Again

            "[COLOR=#444444][FONT=Arial]PT Pertamina marketing director Ahmad Bambang on Wednesday said Pertamina will increase price of 12-kg LPG by Rp1,500 per kilogram as Pertamina is still suffering losses with the current price."

            I think this would be a good time to look seriously at the price of the 3KG LPG. So many have changed from the 12KG to the 3Kg and many are now buying the 3s and refilling the 12s. Pertimina is losing money because of the 3s price, not the 12s. I see no reason why they can't change the 3s to Pp25,000. Up Rp5,000. [/FONT][/COLOR]
            [COLOR=#333333][FONT=Verdana]Some love to milk Apostate.[/FONT][/COLOR]


            • #7
              The price of gasoline in Midwestern America, where we now reside, has dropped to as low as $1.91 per gallon and is projected to go lower. I suppose it could eventually head in the other direction, but the truth is nobody really knows what's going to happen. The combination of a proliferating number of alternative energy sources and their continuing development, the ever increasing efficiency of petroleum using vehicles and the increasing numbers of such vehicles along with no-petrol vehicles, as well, and new methods of extracting oil will continue to pressure the market price of energy.

              Those predicting a rapid return to the good old days (for the oil companies, that is), I would not describe as visionary and possibly may have an interest in creating a self-fulfilling vision (actually lack of vision). It is just as possible, that the world is entering a new era of affordable energy.

              Whatever the future holds, the Jokowi administration has done the right thing in freeing itself from the fuel subsidy millstone. Now, hopefully there will be money for the many long neglected things that Indonesia really needs.


              • #8
                Yes, the reduction is good news, in terms of gov flexibility as well as our actual disposable income as consumers. But:

                1. Read Griftopia by Matt Taibbi who demonstrates that oil prices *sometimes* have nothing to do with supply and demand, but can be based on speculators and other manipulations.
                2. The term subsidy should be used loosely, rather than as an axiom or quasi-religious dogma. Indonesia is a producer of oil, gets its raw supply *FREE* (based on splitting production from wells owned by foreign companies, rather than getting cash lease income), and has to juggle every year an annual budget that attempts to predict a *constant* price of MIGAS as export income versus gasoline as domestic expense, all in the context of fluctuating markets and long-term contracts.


                • #9

                  Now that retail price fixing is gone the market should work. The demand is very competitive, but this cant be said about suppliers. I am guessing this is part of what you are writing about above. Manipulations, or just plain costs involved in getting the supply to the gas stations will mean all sort of differences and hence a variation of prices across the country. Supply will not be a perfectly elastic world price across the country.


                  • #10
                    Not local tricks like hoarding. See Chapter 4 of Taibbi on commodity market manipulations in 2008. DoE figures he cites say that China's consumption only rose 4% over 2007, and the US consumer wasn't more "piggish" than usual, and EIA said global oil supply rose during the first half of 2008. So, if demand increased slightly, and supply increased slightly, why the spike in summer 2008?
                    Last edited by martindo; 03-01-15, 10:08.


                    • #11
                      After the fuel price increase;
                      1. Inflation jumped to 8.36% in December from 6.23% in November.
                      2. Manufacturing Activity weakened further signaling a contraction.
                      3. Trade Balance suffered a deficit of US$425.7 million from a small surplus in October.

                      I guess the increase was “too quick, too many”.


                      • #12
                        Prices have been going up. Not all of course. Will floating the petrol and diesel price (to a lesser extent) help to control inflation?


                        • #13
                          What is all this about competition and suppliers in the Indonesian fuel industry? I understood that Pertamina had a single set price for the nation (except Papua?), and a monopoly. Was there some news about a change in all this?


                          • #14
                            Originally posted by Happyman View Post
                            What is all this about competition and suppliers in the Indonesian fuel industry? I understood that Pertamina had a single set price for the nation (except Papua?), and a monopoly. Was there some news about a change in all this?
                            Not I. See #4 and # 9 above.


                            • #15
                              Someone please explain... how can there be a set price made by the supplier, who also operates (or allows franchisees to operate) the distribution system, and there still be price fluctuations in that system?

                              If the point is that because of operational costs (transportation, wages, etc) the rise and fall of the national price will not be a 1-1 ratio with the international price (but rather a curve), I get it. If there is something else, I don't.