Big Investments for Fuel Oil in Papua

The realization of “One National Fuel Oil Price” in Indonesia is a huge project for our nation, especially President Jokowi as the initiator. Many parties need to be involved and big investments need to be allocated. With this project, the price of fuel oil all over Indonesia would be the same, and in a reasonable price. This is a dream come true for some regions with remotes areas and challenging access, such as Papua.

The investment for this program is considered as a huge project. With 800 billion IDR/year subsidy for Papua and West Papua, a lot of resources are being allocated for “One National Fuel Oil Price” in Indonesia. The funds allocation has already been prepared for 5 consecutive years, hence, the all round budget should be 4 trillion IDR.

According to President regulation Number 191 of 2014, the project is assigned not only to Pertamina. However, the implementation would be the responsible of other state-owned companies in Indonesia. Initially, many parties are skeptical about this program. Some even gave warning regarding the profit loss that could be experienced by Pertamina, as one of the primary agency responsible for the realization of “One National Fuel Oil Price”. However, President Jokowi has emphasized that this program is not about profit, but for the greater good of the people of Indonesia. Hence, this program is necessary to be executed.

fuel oil in Papua
Fuel oil with national price in Papua via

President Director of National Oil Company of Indonesia (Pertamina) said that Pertamina has opened the opportunity for private sectors to cooperate in developing infrastructures that will support distribution of fuel oil in Papua. Private sectors can support in the development of supporting facilities such as gas station that will cooperate with official distributor of Pertamina. This step would help fuel oil price to be decreased. The price of fuel oil in Papua is high due to the uneven distribution of fuel oil distributors, hence there are other sellers that make the supply chain to customers become longer.

Pertamina, in this program, implements cross-subsidy for the distribution of fuel oil in several areas with challenging access, including Papua. The distribution costs would be gradually calculated and more distributors would be added.

President Jokowi’s vision has enabled the price of fuel oil in Papua to stay at 6,450 IDR for Premium, and 5,150 IDR for Solar. It is undoubtedly a great break through. 

This program was initially announced by Jokowi during his Presidential visit in Papua on 18 October of 2016. He assigned the responsibility to Ministry of State Owned Company of Indonesia and Pertamina. Hopefully, in the future, the price of fuel oil in Papua and other regions with challenging access can be decreased and maintained.

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