Govt Reveals the Reason behind Indonesia's Rising Fuel Prices Despite the Declining Global Oil Prices

- 05 April 2022 23:11 WIB
Illustration. A person refueling his car.
Illustration. A person refueling his car.

JAKARTADAILY.ID - On April 1, 2022, PT Pertamina raised the price of Pertamax fuel or BBM, which formerly ranged from Rp 9,000 to Rp 9,400 per liter, to Rp 12,500 to Rp 13,000 per liter. The government's decision to raise fuel prices was taken in response to the recent rise in global oil prices.

This explanation also perplexes the public, because gasoline costs may quickly rise when global oil prices skyrocket.

However, the government hasn't conveyed any statement and has not reduced fuel costs despite declining global oil prices.

In response, the Fiscal Policy Agency (BKF) of the Ministry of Finance explained.

The government has not lowered fuel prices despite the declining global oil price because Indonesia's fuel price is considered to be never above its economic price.

"Because our [fuel] prices at gas stations seldom above the economic price," said Head of the BKF Ministry of Finance Febrio Kacaribu, Monday, April 4, 2022.

"So our prices are always below the economic price," he added.

Febrio further explained that the world's oil prices have multiple times fallen in several months of 2022.

He said that world oil prices had dropped considerably in early March 2020 and have even reached a negative rate.

"There are several months in 2020 where the price of crude oil declined significantly," he remarked.

However, Febrio Kacaribu said it did not last long and immediately returned to the initial mechanism.

"But not long after, back to the subsidy mechanism, back to the mechanism that the price given to the community is lower than the economic price," he added, quoted from the BKF Youtube channel of the Ministry of Finance.

The article was translated from's article titled "Pemerintah Jelaskan Alasan Harga BBM Indonesia Tak Turun saat Minyak Dunia Anjlok".

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Editor: Djauhari Effendi


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