JAKARTA (TheInsiderStories) - The Indonesian government announced set a new fuel prices starting Jan. 5 amid weakening of global oil price, Energy and Resource Minerals Minister Sudirman Said on Wednesday.
He announced, government decided to slash premium prices to Rp 7,150 per liter from previously Rp 7,300 per liter. While diesel price lowering from Rp 6,700 a liter to Rp 5,950 a liter.
Senior minister for Economic Affairs Darmin Nasution adding decreasing of oil prices will reduce operational costs of the industry and at the end could reduce the pressure on inflation. He added, recently government review the fuel price yearly and in the future there is a possibility review it every three months.
“I think it would have no impact on inflation if there is will not be far from the target 4 plus minus 1 percent,” He said.
Government also will reviewing other energy prices, ranging from jet fuel to natural gas for industry, while households will pay less for liquefied petroleum gas, which is most commonly used for cooking. The government will also allow some firms to delay payment of 40 per cent of their electricity bills until next year, and give discounts if the firms keep their employees.
According to IGN Wiraatmaja, the director general for Energy and Miniral Resources, the lowering natural gas prices would cost the government $102 million in state revenue in 2016. Sudirman said, that priority would be given to labour-intensive industries including petrochemical and fertilizer firms.
Indonesia’s official unemployment rate was 5.81 per cent as of February, but many economists believe that the figure is unreliable and the real jobless rate may be much higher.
Previously, President Joko Widodo requested the fuel price cut to help support companies’s purchasing power, which has been dampened by weak exports and high inflation as the weak rupiah pushed up the price of imported raw materials. Private consumption accounts for more than half of Indonesia’s gross domestic product.