Govt to Keep Energy Subsidy at Rp502 Trillion: Minister

Govt to Keep Energy Subsidy at Rp502 Trillion: Minister

Jakarta: The Indonesian government is making every effort to keep the energy subsidy at Rp502 trillion in order to not put pressure on the state budget (APBN), Energy and Mineral Resources Minister Arifin Tasrif has said.
“The government is (working at) keeping the energy subsidy at Rp502 trillion. If we can retrench it, why should we waste it?” he remarked at a press conference at the Energy and Mineral Resources Ministry in Jakarta on Friday.
He said the government has prepared several schemes to maintain the energy subsidy, ranging from restricting the purchase of subsidized fuel oil, and distributing direct subsidies to low-income people, to raising the prices of Pertalite gasoline and diesel oil.

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If the government does not take these measures, the energy subsidy will soar to Rp690 trillion, he explained.
The economic price of Pertalite gasoline is Rp17,200 per liter, while it is currently being sold at Rp7,650 per liter, he highlighted.
Meanwhile, the economic price of diesel oil is Rp17,600 per liter, well above the selling price of Rp5,150 per liter at gas stations. Further, the economic price of Pertamax gasoline is Rp19,900 per liter, while it is being sold at Rp12,500 per liter.
In a single day, Indonesia imports an estimated 600 thousand to 700 thousand barrels of fuel oil per day. With the crude price reaching US$96 per barrel currently, the government is spending around US$65 million on importing fuel oil per day.
He assured that the decision to raise the prices of Pertalite gasoline and diesel oil will not be realized this week because the government still needs to look into many considerations and gauge the economic and social impacts of a fuel oil price hike.
According to Energy Watch executive director Mamit Setiawan, it is time to adjust fuel oil prices in order to reduce the burden on the state budget. The budget allocations for the fuel oil subsidy can be diverted to other development sectors, such as education and health, he said.
If the government can divert Rp100 trillion from the fuel oil subsidy to the education and health sectors, it will have an extraordinary impact on Indonesia’s progress in the future, he added.
“Each student will get Rp12 million per year, so 8.1 million students (across Indonesia) will receive scholarships every year,” he said. 


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