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Energy Minister: Fuel Price Waits for SBY, Jokowi

26 August 2014 13:00 WIB

TEMPO.CO, Jakarta - Minister of Energy and Mineral Resources, Jero Wacik, said that Susilo Bambang Yudhoyono's administration has no plan to raise the prices of subsidized fuel this year. The reason, Jero said, is because the United Indonesia Cabinet has only two months left to rule before it is replaced by Joko Widodo, and Jusuf Kalla's administration.

According to Jero, SBY's cabinet wishes to end its term smoothly, thus any plan to reduce fuel subsidy by increasing fuel prices will be discussed with the new government first.

"To date, Mr. President has not met the president-elect. Later after they meet, we will wait for his direction, and then we will execute it," he said.

In the 2014 State Budget Amendment, the quota of subsidized fuel is cut from 48 million kiloliters to 46 million kiloliters. With the cut, the allocation for fuel subsidy reached Rp 246.5 trillion.

The volume is expected not to last until the end of the year, especially with the uptrend in subsidized gasoline and diesel fuel consumption. To anticipate fuel scarcity, state oil and gas company PT Pertamina has cut the daily allocation of subsidized fuel in its public gas stations nationwide.

"We have to choose between allowing normal consumption and running out by early December, or we could distribute according to quota," Pertamina trade and marketing director Hanung Budya said.

Enny Sri Hartati, an economist at the Institute for Development of Economics and Finance (Indef), said that restricting subsidized fuel as a recurrent policy has no significant impact. She advised the government to raise fuel prices instead, since "energy is a strategic commodity" that people will buy at no matter what price.

AYU PRIMA SANDI | AISHA SHAIDRA | CANTIKA BELLIANDARA | UKKY PRIMARTANTYO



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