Input to Indonesian Fuel Price System Reforms – A review of experiences with fuel pricing systems (IISD)

In January 2015, the Indonesian government introduced a new pricing system for gasoline and diesel fuel. While this will result in large fiscal savings, it will also result in higher average prices for Indonesian consumers. This paper reviews international experience to compare how other countries have dealt with the economic and political challenge of fuel pricing, and to identify what lessons this might provide for strengthening and maintaining Indonesia’s new pricing mechanism and helping consumers cope with price volatility.