Economy: Government announced fuel price hikes for non-subsidized fuel (Pertamax series) ranging from Rp600 to Rp1,550 a liter (+ 9-14% rises). New prices are Rp10,400 for Pertamax (from Rp9,500); Rp11,850 for Pertamax Dex (from Rp10,500); Rp12,250 for Pertamax Turbo (from Rp10,700) while prices for Premium (Rp6,550), Pertalite (Rp7,800) and Bio Solar (Rp5,150) were kept unchanged for the time being as plan to raise Premium fuel price to Rp7,000 (+6.8%) was reportedly postponed. (Kontan daily).
Comment: We view this as good news for Indonesia's financial markets which have been negatively impacted by rising investor risk perception on the back of rising oil price, widening C/A deficit, EM contagion fear and rising trade tensions globally. The fuel price hikes are substantial given that the Pertamax series have the largest contribution to fuel consumption at 13.6m kilo liter year-to-date July 2018 or 48% of the total fuel consumption in the country vs. 5.8m and 8.5m kilo liters for Premium and Bio Solar, respectively.
Sumber : IPS RESEARCH
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