Rising Logistics Costs after Higher Prices of Subsidized Fuels in Indonesia
It has been more than a week since the Indonesian government raised its subsidized fuel prices (Pertalite, Pertamax, and automotive diesel fuel) by an average of slightly over 26 percent. One of the most interesting things is to see whether this decision leads to overall growing prices in Indonesian society. After all, fuel is crucial for the movement of goods and services, and has a significant impact on logistics costs.
There are, indeed, several concrete examples of higher prices. For example, after the subsidized fuel price hike, the local shop in Yogyakarta that sells and delivers gallons of drinking water (Aqua) raised its delivery fee by a whopping 100 percent (from IDR 1,000 to IDR 2,000 per gallon). And, a local warung (restaurant) that sells lotek (a vegetable-based salad with peanut sauce) raised the price from IDR 7,500 to IDR 9,000 for one portion of lotek. This is a 20 percent increase. And, while in these two examples the price increases come from a very low base, it certainly burdens those who have limited incomes.
In this update we are going to take a look at stakeholders’ reactions to these higher subsidized fuel prices.
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