The government has decided to decrease fuel prices as of 5 January 2016. This includes premium fuel prices from Rp7,300 per litre to Rp7,150.
Energy observer from UGM, Dr. Fahmy Radhi, M.B.A., assessed that such decrease in prices was useless as a decrease amounting as low as Rp150 would not give significant effecs to the people of Indonesia.
“The decrease in fuel prices would not affect the increase in purchase power of the people as the amount is very low,” he said on Monday (4/1) on UGM campus.
In his opinion, the decrease would not automatically decrease prices of basic needs and transportation as the rate is not big enough.
Fahmy reaffirmed that the goverment can do intervention on price decrease in basic needs and transportation, but this would burden businessmen in transportation.
“It will surely be tough for public transport operators to decrease the rate, moreover that there’s possibility that the fuel price will increase again,” he said.
Fahmy said that premium fuel prices should have been reduced in a bigger amount, from only Rp150 to Rp500.
“What happened was mismanagement of oil state company Pertamina, but to close the losses the government had opted to charge the rate to the fuel prices, which is not fair,” he said,
He said the added cost for energy security by Rp200 per litre for premium fuel has misled people.
“Many people were misled by the announcement of fuel decrease, instead of Rp350 decrease, it became only Rp150 due to the added energy security cost by Rp200,” said the lecturer in UGM Vocational School.