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Good news to start the year: BBM price decreases

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  • #16
    Originally posted by johntap View Post
    Prices have been going up. Not all of course. Will floating the petrol and diesel price (to a lesser extent) help to control inflation?
    You'd think so; my suppliers will have a harder time selling me on "prices are going up because BBM went up". And you can be sure I'll remind them of it when BBM goes down, next month. I'd expect more stability, with gradual changes in cost, rather than the "BBM % Increase + MY % Increase" we all get and give now.

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    • #17
      Hm

      I am not so sure the market is so rational. Give me a good reason why bus prices should not go back down? They got away with the increase and people are not prepared to fight it, they just pay up. They only seem to understand that prices go up, never down. Though it is all around them: mangoes have gone from 25 to 10k a kilo as the season progressed.

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      • #18
        Originally posted by Happyman View Post
        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?
        .
        Not sure I get your drift here. Have you seen any variation or fluctuation in the last few days??

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        • #19
          Originally posted by johntap View Post
          M

          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.
          Eh? Maybe we are having a communication problem. When I read posts # 9, it seems that you are referring to National Prices as "retail price fixing", and saying it is gone. As far as I know, the fix is still in. So, I don't expect to see any daily fluctuations in the near future. The OP was about monthly prices.

          Maybe there is a plan to vary prices from province to province? What I would be surprised to see is two gas stations across the street from each other with different prices (a common sight in the US).

          I did have a closer reading of the thread, and now understand what JohnOats was on about, (post#3) not Pertamina playing with prices, but rather everyone else, playing with prices based on what Pertamina does. However, I still don't get what you are on about. Help me out, I don't like feeling dense without knowing why.

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          • #20
            You are totally right Hm. I should have read Atlantis. Ignore my comments. I mistakenly thought we were moving to a floating system like in the US. I have no excuse. Mind you, I don't drive and never have, here. My family members do drive.

            If I get time I will read the whole thread again and perhaps contribute more meaningfully, if I can. On JohnOat's point, I am not sure. Who do you mean by "everyone else" btw?

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            • #21
              Originally posted by johntap View Post
              Who do you mean by "everyone else" btw?
              Everyone who is able to negotiate the price of the thing they sell with some flexibility. For one example: the company that harvest trees, The company that mills the wood from the trees, the company that delivers the milled wood to the furniture factory, the furniture factory, and finally the retail outlet selling the furniture.

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              • #22
                You lost me at subsidy. I've not been a fan of government price controls/ manipulation.

                " Whenever the Invisible Hand isn't operating, the Iron Fist is"
                --Bart Kosko


                Originally posted by atlantis View Post
                http://finance.detik.com/read/2014/1.../2790839/1034/

                [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.
                [/FONT][/COLOR]
                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.

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