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RI Govt striving to stabilize airfares amid rising jet fuel prices

Jakarta (ANTARA) – The Indonesian government has been striving to maintain airfare price stability amid rising global jet fuel prices, which directly affect airline operating costs.State Secretary Minister Prasetyo Hadi said the surge in global aviation fuel prices is unavoidable and has become a main factor driving potential increases in flight fares.“It cannot be denied that global aviation fuel prices have risen significantly. This increase has led to impacts such as higher airfare,” he said at the Presidential Palace Complex here on Wednesday.He explained that the government has been navigating between global energy price mechanisms and protecting people’s purchasing power while ensuring smooth mobility.Excessive airfare increases, he warned, could suppress economic activity by affecting public movement and inter-regional economic distribution.“The government is looking for formulas to find a balance between global oil prices and ensuring the impact on the public is not too significant,” he said.As a mitigation step, the government has introduced subsidy policies to contain airfare increases, targeting price hikes within a controlled range.Previously, the government said domestic airfare increases would be maintained at around 9-13 percent in response to rising jet fuel prices linked to the Middle East conflict.To support this, several measures have been prepared. First, a tax incentive in the form of government-borne value-added tax (VAT) of 11 percent for economy-class tickets, which will be implemented for two months and evaluated based on geopolitical developments.Second, the government is offering a 0 percent import duty for aircraft spare parts.This incentive is expected to boost economic activity by around US$700 million, increase contributions to gross domestic product (GDP) by up to US$1.49 billion, and create around one thousand jobs.Moreover, the government has adjusted the upper limit of fuel surcharges, setting a maximum of 38 percent for all aircraft types, both jet and propeller.