Abstract
Presidential Regulation No. 191/2014, regulates the subsidy policy for Gas Oil, which is a fixed subsidy. Meanwhile, the retail selling price of Gas Oil will fluctuate in the society according to the formula calculation. However, since April 2016 the price of Gas Oil has been fixed. In certain cases, the determination of the retail selling price may differ from the calculation of the formula considering the state's financial capacity, the purchasing power of the people, and the real economy. This research will examine the influence of the state's financial capacity, the purchasing power of the people, and the real economy, either partially or simultaneously, on the policy of determining the retail sale price, and its impact. The test was carried out through multiple linear regression analysis using IBM Statistics 20. The results showed that the state's financial capacity and the real economy had a significant effect on the retail selling price policy for JBT Solar Oil. Meanwhile, people's purchasing power does not have a significant effect. The determination of the retail selling price of Gas Oil that is not in accordance with the calculation formula may give an impact on society, business entities, and the government.
Highlights
In order to allocate more beneficial budget to the society, the Government has reformed the fuel subsidy policy as outlined in Presidential Regulation Number 191 of 2014 concerning the Supply, Distribution and Retail Selling Price of Fuel as amended by Presidential Regulation Number 43 of 2018
Effect of State Financial Capacity on Determination of Gas Oil Retail Selling Price. This finding shows that the government's decision to set the retail selling price of Gas Oil is in accordance with the provisions in Presidential Regulation Number 43 of 2018, that is by considering the state's financial capacity
It can be said that the fixed subsidy policy for Gas Oil does not completely reform the floating subsidy policy that previously applied
Summary
In order to allocate more beneficial budget to the society, the Government has reformed the fuel subsidy policy as outlined in Presidential Regulation Number 191 of 2014 concerning the Supply, Distribution and Retail Selling Price of Fuel as amended by Presidential Regulation Number 43 of 2018. Important changes regulated in the Presidential Regulation are the revocation of the Gasoline subsidy and the change of the Gas Oil subsidy scheme, from floating subsidy to fixed subsidy The implementation of this policy has a significant impact on the fuel subsidy budget allocation in the state budget which has been significantly lower since 2015. This study will examine the effect of the state's financial capacity, people's purchasing power, and the real economic conditions, either partially or simultaneously, on the determination of the retail selling price of Gas Oil in the society These three variables are factors in determining the retail selling price of fuel as regulated in Article 14 Paragraph (8) of Presidential Regulation Number 43 of 2018. The organization of this text will be as follows: Literature Review, Methodology, Empirical Data and Analysis, Results and Discussion, and Conclusions
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