JAKARTA. The government announced on Wednesday that it would cut subsidized fuel prices by Rp 500 (4 US cents) per liter, which is expected to reduce transportation fares by 3 percent.

The government will cut the price of subsidized Premium gasoline from Rp 6,950 per liter to Rp 6,450, down by Rp 500. Similarly, subsidized diesel will drop from Rp 5,650 per liter to Rp 5,150. Kerosene remains at Rp 2,500 per liter.

"The new prices will be effective from April 1 at 12 a.m.," Energy and Mineral Resources Minister Sudirman Said said at a press conference at the State Palace.

The new prices will be valid until September, with the ministry planning to review fuel prices every three months. The new prices, Sudirman continued, had taken into consideration Ramadhan and Idul Fitri in June and July.

"Hopefully over the next six months we can maintain these prices, so people can plan properly and also not be bothered by volatile fuel prices," he added.

Transportation Minister Ignasius Jonan expected that transportation fares would fall by 3 percent on average following the fuel price cuts. "I will send letters to local administrations to cut the transportation fares for trains, ships and land transportation," he added.

Pertamina president director Dwi Soetjipto said the company was ready to implement the new prices for subsidized gasoline and diesel. "Pertamina is ready to maintain these prices until September so that there is no significant turmoil for six months," he said.

Earlier, the state-owned energy firm said it would cut non-subsidized gasoline and diesel prices by Rp 200 per liter from 12 a.m. on March 31. It will be the second price cut this month, with total cuts of Rp 400 per liter.

With a Rp 200 cut, Pertamax gasoline will drop to Rp 7,550 per liter and Pertalite to Rp 7,100.

The high-quality diesel Pertamina Dex is set at Rp 8,400 and Pertamax Dex at Rp 8,450. The price of conventional non-subsidized diesel will drop from Rp 7,150 per liter to Rp 6,950. (Ayomi Amindoni)

Editor: Barratut Taqiyyah Rafie