JAKARTA: The Indonesian government has dismissed concerns about rising fuel prices following Iran’s attack on Israel last weekend. Pertamina guarantees that fuel prices will remain stable even though the attack has the potential to cause world crude oil prices to skyrocket.
This was conveyed by the Main Director of PT Pertamina Patra Niaga, Riva Siahaan, as reported by the Antara news agency in Jakarta on Monday (15/4). He said that crude oil prices do have an upward trend, but Pertamina continues to ensure that the national fuel supply is safe.
“We are also committed to keeping domestic fuel prices stable so that they do not impact inflation and people’s purchasing power,” Riva told Antara.
Riva continued, the government has issued a directive to hold fuel prices until the first half of 2024, so that Pertamina will not increase fuel prices even if production costs increase due to rising world crude oil prices.
“As a state company, we support the government’s efforts to maintain a more stable and conducive national economy,” he said.
Concerns about rising fuel prices arose after Iran fired hundreds of projectiles at Israel last Saturday. This attack was said to be a response to Israel’s attack on the Iranian Embassy in Syria on April 1.
According to Richard Bronze, an analyst at data company Energy Aspect quoted by CNN, Iran exports 1.5 million barrels of crude oil per day or the equivalent of 1.5 percent of global oil supplies. The International Energy Agency (IEA) noted that Iran produced a total of 3.25 million barrels of crude oil per day in March.
Iran’s attack has the potential to disrupt oil shipping routes in the Strait of Hormuz, off Iran’s southern coast. According to observers, if this conflict continues, Iran could attack tankers crossing the strait, which is an important shipping route for oil and gas products.
“This is the most important channel in the global oil market,” Bronze said. “Any disruption to this pathway would have a major impact on global oil supplies and impact oil prices.”
However, the Director General of Oil and Gas (Migas) at the Ministry of Energy and Mineral Resources, Tutuka Ariadji, said they believed that the conflict between Iran and Israel would not last long.
“We still think this short term“Because of world trends, many parties don’t want prices that are too high,” said Tutuka in the webinar ‘An Exciting Chat on the Impact of the Iran-Israel Conflict on the Indonesian Economy’, on Monday as quoted by Kompas.
Tutuka explained that the upward trend in Indonesian crude oil prices has occurred from February to April 2024, around US$5 per barrel every month. The conflict between Iran and Israel, he said, could make crude oil prices reach US$100 per barrel.
According to Tutuka, the Indonesian government is currently still waiting for the response from Israel and the United States regarding the Iranian attack. It is this response that will determine whether the trend of increasing prices will continue, or whether it will experience spikes or a sharp rise for a while before finally falling again.
“So is it going to be sustainable or… spikes“I think we tend to wait first to see what Israel and America react to the conflict, and it is also likely that it will spike in the not too distant future,” he explained.
