Global Trade Alert

On 1 January 2015, Indonesia scrapped its subsidies for petrol and lowered the ones for diesel to 1'000 IDR/litre (on that day ca. 0.08 USD/litre).
Since the subsidized fuel was available only at the state-owned company Pertamina's petrol stations (90% market share), the cut in subsidies increased the competitiveness of foreign companies in the market - mostly Shell and Total.
The prices at Pertamina petrol stations are set each month by the Ministry of Energy and Mineral Resources (EDSM) based on the global market prices.
As the regulation increased the ability of foreign companies to compete on the Indonesian market, the subsidy cuts can be interpreted as a trade-liberalizing measure.
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. The subsidy recipient produces internationally tradable goods. On this metric, the state aid proposed here is discriminatory.