Govt Must Shell Out Rp280 trillion If Subsidized Fuel, LPG Price Not Increased
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26 April 2022 07:00 WIB
TEMPO.CO, Jakarta - Montty Girianna, Coordinating Ministry for Economic Affairs’s Deputy for Coordination and Development of State-Owned Enterprises, Research, and Innovation, said the government’s plan to increase the price of subsidized fuels such as Solar and Pertalite, as well as Liquefied Petroleum Gas (LPG), must be executed immediately.
The policy, he argued, will instantly ease the growing burden of subsidies and compensation until the first quarter of this year.
Montty emphasized that presently, the government must shell out Rp280 trillion for the fuel subsidy and compensation, which was doubled from the initial plan in the 2022 State Budget (APBN) at around Rp140 trillion.
“If the price of LPG stays at Rp4,259 per kilogram or around Rp12,000 per cylinder, then we have to shell out around Rp130 trillion for LPG. Not to mention Solar and Pertalite gasoline that we have to shell out around Rp200 trillion. So, in total, we have to spend Rp80 trillion if we don't increase the price,” said Montty at the Energy Corner, Monday, April 25.
Therefore, the Coordinating Ministry for Economic Affairs is preparing a number of scenarios related to the government's plan to increase the price of subsidized fuels and-3 kilogram LPG. The scenarios were designed along with several relevant ministries such as the Ministry of Energy and Mineral Resources, the Ministry of Finance, and the Ministry of SOEs to be then submitted to President Jokowi.
Montty explained, the Ministry of Energy and Mineral Resources will propose the amount of the price hike and the volume that should be added for the subsidy quota. Then, the Finance Ministry will calculate how much the projected inflation will be if the fuel price is raised within a certain time.
“We’ve asked the Finance Ministry to design social safety not for people who are vulnerable to this price surge,” said Montty.
Read: Coal Trucks Banned from Getting Subsidized Diesel Fuel: Pertamina
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