REPUBLIKA.CO.ID, JAKARTA -- State-owned oil and gas company Pertamina will suffer losses if it sells diesel oil at a price below Rp6,200 per liter, according to its president director Dwi Soetjipto.

"Pertamina will suffer losses if it lowers the price of diesel oil below Rp6,200," the Pertamina president director said after a meeting with President Joko Widodo (Jokowi) at the State Palace here on Thursday.

He noted that one of the references for lowering the price of diesel was the world crude price.

"Let's look at the government's next policy as there are still many challenges in the future. There was also a rebound in the price of diesel in the world market yesterday. Probably, the government will take that into account. However, Pertamina is ready to implement any decision that the government makes," Dwi Soetjipto added.

Pertamina will also carry out an evaluation of subsidized fuels in the middle of February.

Referring to the declining world crude prices that have been affecting Pertamina's profit, Dwi Soetjipto remarked that Pertamina will face the impact efficiently and, in fact, it has already started the process.

"Of course, it will have some effects. It will not only affect Pertamina but all of its upstream businesses as well. But, we will do our best from the efficiency aspect to improve our performance," the Pertamina president director stated.

According to him, when he met with the President, he reported the development in the management of Pertamina, including the efficiency-enhancing efforts that are carried out through several policies taken by the company.

It was reported on Tuesday that the government will soon lower the price of subsidized diesel oil, which currently stands at Rp6,400 a liter.

The price of diesel oil may be lowered due to a decline in the stock cost of Rp300 per liter, Energy and Mineral Resources Minister Sudirman Said pointed out at a working meeting with the Commission VII of the House of Representatives here on Tuesday.

"So the price of diesel oil may decline," he added.

A drop in the price of diesel has also been recommended by the House's Commission VII.

At the meeting, the Great Indonesia Movement Party faction urged the government to declare when exactly the price will be lowered and how much will be lowered.

Meanwhile, other factions in the DPR left it to the government to decide.

The global oil prices, which have continued to fall since mid-2014, have the potential to rebound significantly to US$90 a barrel this year, Standard Chartered Bank senior economist Fauzi Ichsan has forecast.

Therefore, the Indonesian Crude Price (ICP) assumption of US$70 a barrel set in the revised 2015 state budget is not relevant to the market forecast, he stated during a Global Research Briefing recently.

"If we look at the market consensus, the ICP assumption of US$70 a barrel is not realistic. Why? Because the market consensus is around US$90 a barrel," he noted.

The Indonesian government has revised the ICP assumption to US$70 a barrel in the revised 2015 state budget from US$105 a barrel in the draft 2015 state budget in response to a steady shortfall in the global oil prices, which fell below US$60 a barrel in 2014 from US$100 a barrel previously.

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