Subsidized BBM Price Increase Drives Highest Inflation in Private Vehicle Costs in September 2022

The Central Statistics Agency (BPS) reported that transportation inflation reached 8.88% in September 2022 compared to the previous month (month-on-month/mom), with the consumer price index (CPI) for transportation at 119.64.

Last month's transportation inflation rate was the highest since the index calculation began (2018=100). Similarly, the transportation CPI reached its highest level since the start of index calculation.

Private vehicle operation was the transportation expenditure sub-group with the highest monthly inflation, reaching 14.23% (mom).

This was followed by passenger transportation services, which experienced monthly inflation of 5.12% (mom); goods delivery services, 0.34% (mom); and vehicle purchases, 0.1% (mom).

The following is the annual inflation of the transportation expenditure group in September 2022:

- Transportation: 16.01% (yoy)
* Passenger Transportation Services: 23.11% (yoy)
* Private Transportation Equipment Operation: 18.60% (yoy)
* Vehicle Purchases: 3.68% (yoy)
* Goods Delivery Services: 1.94% (yoy)

As is known, on September 3, 2022, the government raised the price of Pertalite (RON 90) by Rp2,350 per liter (30.72%) to Rp10,000 per liter, from the previous price of Rp7,650 per liter. Similarly, the subsidized Solar fuel price increased by Rp1,650 per liter to Rp6,800 per liter, from the previous price of Rp5,150 per liter.

The government's step to reduce the burden of energy subsidies has triggered high inflation in the transportation sector. On the other hand, the government also took anticipatory measures by disbursing Rp24 trillion for social safety nets to offset the fuel price increase and curb the surge in inflation.