Long Fuel Queues May Increase Inflation Risks

RRI.CO.ID, Jakarta - Long queues at fuel stations, especially for government-subsidized diesel, have become an ongoing issue in North Sumatra, Indonesia. The situation has persisted despite recent fuel price adjustments and raised concerns about its impact on transport operations, businesses, and the broader economy.

So far, the impact on food prices and necessities has remained limited. However, if fuel supply issues and long waiting times continue for an extended period, they could increase operational costs for businesses and add to inflationary pressure.

One of the main concerns is the impact on the transport and logistics sectors. Longer waiting times at fuel stations can delay delivery schedules and increase costs for companies that rely on diesel-powered vehicles.

Reports from the transportation sector indicate that long fuel queues can extend delivery times by around three hours. The additional time is mainly caused by the need to locate stations with available diesel and queue to refuel.

In North Sumatra, this situation can affect the distribution of agricultural products from production areas to traditional markets. When deliveries are delayed, supply chains may become less efficient, and higher transportation costs could eventually influence market prices.

Another challenge is the higher fuel costs for some businesses. When subsidized diesel is not easily available, some operators may use non-subsidized fuel, which is considerably more costly and can increase overall operating costs.

Long fuel queues also lower the productivity of transport services. Longer waiting times mean vehicles spend more time idle, increasing expenses and reducing efficiency for logistics companies and passenger transportation services.

Beyond transportation costs, fuel queues can create other economic losses, including lost time, increased daily operating expenses, and possible delays in goods distribution. If the situation persists for a longer period, the impact could spread to various sectors and add to inflationary pressure.

Writer: Gunawan Benjamin (Economist, Islamic University of North Sumatra)