Pertamina, Shell raise prices of non-subsidized fuels in Indonesia

Pertamina and Shell Indonesia have announced that the cost of unsubsidized fuel in Indonesia has increased, in response to the rising cost of crude oil.  Pertamina has raised the price of Pertamax fuel in Greater Jakarta to US$1.05 per liter, up 4%.  Pertamax Plus in Greater Jakarta is priced at Rp 10,000 (US$1.16) and Pertamina Dex diesel is Rp 10,350 (US$1.20).  Pertamina’s competitor Shell has also adjusted its fuel prices upward.  Shell raised its Shell Super at Rp 9,050 (US$1.05) in Greater Jakarta, while Shell Super Extra is at Rp 9,350 (US$1.09) in Greater Jakarta and Rp 9,600 (US$1.12) in East Java.  Djaelani Sutomo, Pertamina marketing director, said the new prices for non-subsidized fuels should not send car owners running to buy subsidized fuels.  “We keep educating buyers. We remind them that if their cars are manufactured above the year of 2005, they have to buy high-octane fuels [octane 92 or 95] otherwise their machines won’t work optimally,” he explained.  Eri Purnomo Hadi, the chairman of the association of fuel station owners, Hiswana Migas, disagrees.  He stated that the increase in the prices of non-subsidized fuels will encourage customers to purchase more subsidized fuels.  He suggests that raising the prices of subsidized fuels could help.  The Central Statistics Agency warned against raising the price of subsidized fuels, saying that this move could stoke inflation.(May 3, 2011)