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Indonesia mulls over applying "ceiling price" for fuel retail sale next month

Xinhua, December 22, 2015 Adjust font size:

Indonesia planned to apply "ceiling price" mechanism on retail sales of fuels which would be applied next month in a bid to cope with decreasing oil price in global market, Energy and Mineral Resources Minister Sudirman Said said here on Tuesday.

"There will be upper and lower limits. Should the real global oil price were below the retail price, the exceeding amount would be reserved. It could be the most proper option to apply,"the minister said.

The reserved exceeding amount would be used to cover the losses when the real global oil price were above the retail price, the minister added.

Indonesia has applied several fuel retail sale mechanisms on its subsidized fuels, which were reviewed on one month, two months and three months basis.

According to the minister, the reserved funds can also be used to anticipate pressures in fiscal sector incited by fluctuation in global oil price.

Calculation to set the retail price of the fuels was still underway in the financial ministry at present, set to be applied in January next year, Sudirman added.

The ceiling price idea on retail fuel sales had also been considered during the then-administration of President Soesilo Bambang Yudhoyono, but never been applied. Endit