Indonesian Pertamax Fuel Prices Poised to Drop in July on Global Oil Price Decline

The price of non-subsidized fuel in Indonesia, such as Pertamax, is expected to decrease in early July as global oil prices continue their downward trend, according to energy economist Fahmy Radhi from Gadjah Mada University (UGM).

Radhi stated that global oil prices have fallen to approximately $80 per barrel, a significant drop from the over $100 per barrel recorded during heightened tensions between the United States, Israel, and Iran. He explained that Iran's earlier disruption of the Strait of Hormuz had impacted global supplies and driven prices up. However, as tensions eased and the strait reopened, concerns over oil shortages subsided, leading to price declines.

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Pertamax prices should be reduced at the beginning of July.

Despite the current optimism, Radhi cautioned that negotiations between Iran and the U.S. remain uncertain and do not guarantee lasting peace. He noted that prices will likely continue to fluctuate. Nevertheless, he advised that if Pertamax prices in Indonesia remain above market levels during evaluations, the government should consider reducing them.

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Prices will continue to fluctuate, and it is unclear for how long. However, for Indonesia, if Pertamax prices remain above market levels during an evaluation, the government should lower them.

Indonesian Finance Minister Purbaya Yudhi Sadewa echoed this sentiment, suggesting that Pertamax prices could indeed decrease in line with global oil price movements. He added that a potential peace agreement between the U.S. and Iran could positively impact the global economy, stabilize the rupiah exchange rate, improve financing conditions, and encourage investment.

The Ministry of Energy and Mineral Resources (ESDM) confirmed that the government is actively securing alternative energy sources amidst ongoing negotiations. Spokesperson Dwi Anggia acknowledged the positive signals toward easing Middle East tensions and stabilizing global oil prices but stressed that the situation remains fluid. She emphasized the importance of maintaining optimism while also taking precautionary measures.

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Optimism is important, but precautionary measures must also be taken.