Jakarta. The government plans to cut the price of leaded gasoline by 5 percent and subsidized diesel by 8 percent next year, following a drop in global oil prices.
The government will likely cut the price of gasoline, sold under the trademark Premium, by between Rp 200 and Rp 300 (1 cent-2 cents) a liter from the current price of Rp 7,300 a liter, I.G.N. Wiratmaja, the director general of oil and gas at the Ministry of Energy and Resources Mineral, said on Tuesday
The price of diesel fuel will be cut to Rp 6,400 a liter from the current Rp 6,900.
The government will announce its final decision later today. The new price would be effective on Jan. 1.
Oil prices reached its lowest point in the last 11 years on Monday, thanks to a supply glut resulting from the Organization of Petroleum Exporting Countries' decision to maintain production as part of its effort to choke the United States' fracking oil drillers amid slowing demand from China, the second largest oil consumer after the US.
Years of under investment in new oil exploration has forced Indonesia to import about half of its fuel needs.