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Government Maintains Energy Prices for Q1 2018

The Energy and Mineral Resources Ministry has announced that it will maintain the prices of electricity and certain fuel types in the first quarter of 2018, forcing state energy giants Pertamina and PLN to bear the burden of increasing oil and coal prices.

“The decision has been made to preserve people’s purchasing power,” Energy and Mineral Resources Minister Ignasius Jonan said during a media conference on Wednesday.

Subsequently, the prices of Premium gasoline, which has a research octane number (RON) of 88, and subsidized diesel fuel will be maintained at Rp 6,450 (49 US cents) and Rp 5,150 per liter, respectively. These rates have been in place since April 2016, even though the prices of global crude have been in an upward trend lately.

The price of global benchmark Brent crude reached $66.78 per barrel on Tuesday after falling to as low as $44.82 per barrel on June 21.

Meanwhile, the price of electricity for low capacity non-subsidized customers will remain unchanged at Rp 1,467.28 per kilowatt hour (kWh). Prices for mid-capacity and high-capacity will hover at Rp 1,114.7 and Rp 996.74 per kWh, respectively.

This is despite the 15.4 percent increase in the price of Asian benchmark Newcastle coal to $96.63 per ton between January and November.

Pertamina and PLN has pledged to undertake various efficiency measures to cope with the government’s decision to maintain current fuel and electricity prices.