After
mulling various options, the government is now considering raising the
subsidized fuel price by up to a third to help reduce fuel subsidy costs in the
state budget.
Energy and Mineral Resources Minister Jero
Wacik said on Wednesday that the government was considering raising the price
of subsidized fuel by up to Rp 1,500 (17 cents).
“There were proposals [to raise the subsidized
fuel cost] by Rp 500 per liter, Rp 1,000 and Rp 1,500 per liter. We have
received these three [possible] numbers,’’ Jero told reporters after a cabinet
meeting at the State Palace.
Citing various input from the public, Jero
added that “raising [the price] is the most feasible option to take.”
He did not say which of the three options was
the likeliest to be adopted but said the government would submit the proposal
to the House of Representatives for further discussion.
“If possible, it should reach the House of
Representatives in early March,’’ the minister said.
Any price increase in the state budget,
including that of subsidized fuel, has to be approved by the House.
Jero said the government would provide
“transportation coupons,” or public transportation vouchers, to the public to
ease the pain of the subsidized fuel price increase.
Earlier on Wednesday, President Susilo Bambang
Yudhoyono hinted about the possibility of the fuel price increase.
He said that in view of the fast-rising global
oil prices, the government needed to review its projected oil expenditure for
the state budget.
“We need to redefine it into a realistic
assumption in line with the conditions, including the subsidy policy and the
one on fuel and electricity rates,” he said.
Yudhoyono added that all available information
pointed to raising subsidized fuel prices as a superior alternative to
launching a program of conversion to natural gas. That plan was panned as
impractical and time-consuming.
The government last raised the price of
subsidized fuel in May 2008 by an average of 33 percent to Rp 6,000 per liter.
In 2005, one year after Yudhoyono took office, it was raised twice, from Rp
1,800 per liter to Rp 2,400 per liter (33 percent) in March and then to Rp
4,500 per liter (88 percent) in October.
Indonesia’s subsidized fuel now sells for Rp
4,500 per liter while the higher-octane, unsubsidized Pertamax and Pertamax
Plus are priced from Rp 8,000 to Rp 9,000 per liter on Java.
Arientha Primanita
Jakarta Globe
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