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Fuel Price Set to Soar Next Month

Indonesia’s Days of Cheap Fuel Likely to End Abruptly in October. A Looks at Comparative Fuel Prices Around the World.

(9/19/2005) There now appears little doubt that Indonesia's days of cheap fuel prices may be coming to a screeching halt in October as the Government, doubly-burdened by a weakening Rupiah and skyrocketing world fuel prices, is no longer able to sustain the burden of massive public fuel subsidies and introduces widely anticipated fuel price increases.

While policymakers in Jakarta weigh the political and economic repercussions of the various alternatives open to them, many analysts are now warning consumers to expect fuel prices to increase by as much as a minimum of 50%. Moreover, some observers predict that the cost of premium and diesel, now standing at between Rp. 2,400 and Rp. 2,200 per liter, could possible increase by as much as nearly 100% to between Rp. 4,000 – Rp. 5,000 per liter (approximately US$0.39 – US$0.49).

Prices paid by Indonesians at the gas pumps, among the lowest in the world, are a major contributor to the growing national debt and a major stimulus for corruption for smugglers who sell Indonesian fuel abroad at substantial profits at world market prices.

What it Costs to Fill Up Your Tank

In an informal survey of the price of vehicle fuel, we present the current approximate cost of a gallon of premium gasoline in selected countries around the world. As the chart presented on balidiscovery.com shows, Indonesia enjoys some of the cheapest gasoline prices in the world.

If, as some fear, the price of a gallon of Indonesian gasoline increases to something approaching US$1.82 a gallon, Indonesia motorists will still enjoy access to some of the lowest cost gasoline on the planet.