“When Will Pertalite Fuel Prices Drop? Expert Opinion and Analysis | CNBC Indonesia News”

Jakarta, CNBC Indonesia – It can be said that the world crude oil price has fallen far compared to the price in 2022 which had exceeded US$ 100 per barrel. The price of world crude oil has now fallen to around US$ 78 per barrel for the Brent type and US$ 74.5 per barrel for the West Texas Intermediate (WTI) type.

Nevertheless, until now the price of subsidized fuel oil (BBM), such as Pertalite (RON 90) has not decreased since September 2022. In fact, the price of non-subsidized fuel has undergone price adjustments several times.

So, when will Pertalite fuel prices drop?

Economist at the Institute for Development of Economics and Finance (INDEF) Abra Talattov believes that Pertalite’s selling price reduction can be considered for a reduction when the price of crude oil is lower than the current price of US$ 74 per barrel.

Abra estimates that the price of Pertalite fuel can drop below Rp. 10,000 per liter when the price of crude oil is below US$ 60 per barrel.

“So it is indeed a safe limit, the government or Pertamina will reduce the price if the ICP (Indonesian crude oil price) is below US$ 60 per barrel. Indeed, economically it is possible to adjust the Pertalite price,” Abra explained to CNBC Indonesia, quoted on Sunday (30 /4/2023).

However, he assessed, for now Pertalite’s selling price is still below the economic price of RON 90 fuel on the market. Therefore, he said that it was difficult for the government to reduce the selling price of Pertalite at this time. That way, the possibility of a reduction in the price of Pertalite in May 2023 is very slim.

“Indeed, the economic price of Pertalite is still above the current selling price. So, the potential for price reductions is still rather slim, it is still difficult, the economic price is still above the current selling price,” he added.

But with this small possibility, Abra assessed that the government could lower Pertalite’s selling price if the government allocated a fuel subsidy compensation budget for this year.

“But the option to reduce subsidized fuel prices is still possible. Even though the ICP is US$ 75 (per barrel), the exchange rate is also above the assumed Rp. 14,800 (per US$), it is still possible to reduce prices, if the government allocates this year’s compensation budget for reduce the price of Pertalite,” he concluded.

Previously, the Director General of Oil and Gas (Dirjen Migas) of the Ministry of Energy and Mineral Resources, Tutuka Ariadji, said that the Pertalite price could be lowered below Rp. 10,000 per liter if the world crude oil price touched US$ 65 per barrel.

“If we suspect yes, from (the price of crude oil) US$ 65, we have to calculate, that this (Pertalite) actually has to be lowered, yes. We will see if the oil price is already US$ 65. If not, I don’t think so. (Pertalite price reduction),” he explained when met at the BPH Migas Building, Jakarta, Monday (10/4/2023).

(were/were)