Soaring Oil Prices Provide Little Room for Fuel Subsidies

Oil rig
Summary

The current global energy crisis may also hit Indonesia's economy, which relies heavily on imported oil and petroleum products (BBM) as well as liquefied petroleum gas (LPG). Any global turmoil will always lead to price increases.

Oil and gas observer Widhyawan Prawiraatmadja was sure that the energy crisis could raise the procurement costs. "Indonesia, like it or not, must be ready to import them at inflated market prices," says Widhyawan, who was the Indonesian governor for OPEC 2015-2017 on Tuesday. If domestic prices do not go up, the government will have to cover the differences with subsidies through Pertamina.

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