Finance Minister: No Subsidized Fuel for Cheap Car

TEMPO.CO, Jakarta - Finance Minister Muhammad Chatib Basri asked the Ministry Industry to commit and take concrete steps to prevent the low cost green cars (LCGC) from using subsidized fuel, fearing the project will boost the consumption of subsidized fuel.

"I am concerned about the fuel problem because I worry that consumption will be high. In terms of taxes, [the program] could be canceled out because the number LCGC sold has increased—so that the revenue has risen. But the important thing is about fuel consumption," Chatib said yesterday.

Chatib asked the Industry Ministry to formulate technical means to prohibit LCGC from using subsidized fuel, such as by nozzle arrangement or other technical systems could affect the car engines if they use subsidized fuel.

Chatib had sent an official letter to Industry Minister MS Hidayat, asking the latter to evaluate the cheap cars' fuel consumption. The two ministers have yet to come to an agreement, as Hidayat stresses more on the Indonesian industry's competition with imported vehicles. "It encourages investment so that Indonesia will be self-sufficient in car technology," said Hidayat.

Hidayat said that the government has already prevented the LCGC from using subsidized through the Industry Ministry's Regulation that requires the industry to include the mandate to use non-subsidized fuel consumption in its products. This rule must be followed; otherwise the Ministry will revoke the fiscal incentives on the cars.

"But once the car is purchase, it is completely the owners right [to use which type of fuel], with all its consequences," he said.

ANGGA SUKMA WIJAYA | ALI HIDAYAT | AYU PRIMA SANDI | MUCHAMAD NAFI