Analysts warn the price increases could encourage better-off consumers to switch to products meant for lower-income households
The move by state energy company Pertamina underscores the government’s balancing act: allowing market-priced fuels to rise with global crude costs while shielding subsidised products used by lower-income Indonesians from increases that could carry economic and political consequences.
On Saturday, Pertamina raised the price of RON-98 petrol, known in Indonesia as Pertamax Turbo, to 19,400 rupiah (US$1.13) per litre from 13,100 rupiah, while costs of diesel products such as Dexlite and Dex climbed around 60 per cent.
Pertamina also raised the price of 12kg liquefied petroleum gas (LPG) canisters to 228,000 rupiah from 192,000 rupiah each in Jakarta, East Java and Central Java.
Analysts said the direct effect on headline inflation could be limited, but warned that a widening gap between subsidised and non-subsidised energy prices could encourage better-off consumers to switch to products meant for lower-income households.
Some consumers complained about the new prices, particularly for 5.5kg and 12kg LPG canisters.
Source: News - South China Morning Post
