Environment

Indonesia unsubsidised fuel policy harms consumers, may create unfair practices, anti-trust agency says

Indonesia unsubsidised fuel policy harms consumers, may create unfair practices, anti-trust agency says

JAKARTA :Indonesia’s anti-trust agency found that the country’s import restrictions on unsubsidised fuel sold by private companies have reduced the options for consumers and have the potential to lead to an unfair competitive environment, it said on Thursday.

Shell and BP-AKR, the operator of BP’s fuel stations, said they have experienced inventory shortages for some gasoline products since late August.

Shell has also made operational staffing adjustments across its gas stations.

The market share of private fuel distributors, which sell only unsubsidised fuels, is small compared to those controlled by the state-owned Pertamina.

But the fuel restrictions led to “the loss of consumer choice for non-subsidised fuels and strengthened the domination of Pertamina’s market,” the anti-trust agency, known locally as the KPPU, said in a statement.

The policy may create unfair business competition, in the form of market foreclosures or discrimination, the agency said.

It said the periodic evaluation of the policy was important to ensure fair business practices.

Restrictions on the sales of subsidised fuel and a corruption probe into Pertamina have triggered a shift in demand towards Shell and BP, putting their own supplies under pressure.

A spokesperson for Indonesia’s energy ministry could not immediately comment on the KPPU’s findings.

Bahlil Lahadalia, Indonesia’s energy minister, said earlier that private fuel retailers had been granted a 10 per cent increase in import quotas this year compared to last year. He urged the companies to “collaborate” with Pertamina.