Setting Fuel Prices in Jokowi's Era in Light of Adam Smith and Ibnu Taimiyah Pricing Theory

Fuel oil (BBM) is one of the needs of the Indonesian people, which must be guaranteed when
available. So the government plays a vital role in managing. Included in the policy authority for
setting subsidised fuel prices, the government determines prices. During Jokowi's
administration, which is entering its second term as president, the policy of changing fuel prices
has been implemented several times. This study describes the traces of setting fuel prices under
Jokowi's administration, using qualitative research with descriptive analysis that describes the
problem using existing theory. The theory used in this study is pricing according to classical
economists, namely Adam Smith and Islamic economists, namely Ibnu Taimiyah. The results of
this study explain that based on Adam Smith's thoughts regarding the theory of pricing, realistic
prices operate independently in a free market without interference from the authorities.
In contrast, the authority is to determine subsidised fuel prices. So Adam Smith's thinking
cannot be applied to conditions of changes in subsidised fuel prices in Indonesia. Meanwhile,
according to Ibn Taimiyah, there is a concept of price changes due to demand and supply. The
reality is that the increase in fuel prices is not due to supply and demand but budgetary issues.
Then the existence of a fair price, according to Ibn Taimiyah, aims to create a sense of fairness
for both the seller and the buyer. Through the reasons for managing subsidy targets, the form of
fair prices, according to Ibnu Taimiyah, can be used in the current increase in fuel prices.