Sri Mulyani: Energy Compensation, Subsidy Budget Climbs to Rp443.6tn
19 May 2022 16:32 WIB
TEMPO.CO, Jakarta - Indonesia's Finance Minister Sri Mulyani Indrawati said the energy subsidy and compensation budget will soar this year. That budget, she said, is estimated to rise to Rp443.6 trillion as a result of increased oil prices.
In the 2022 State Budget, the Indonesian Crude Price (ICP) was pegged at US$63 per barrel. Meanwhile, the current ICP has reached US$100 a barrel.
"Therefore, the subsidies and compensation increased significantly from Rp152.5 trillion to Rp443.6 trillion," Sri Mulyani said in a meeting with the House of Representatives' Budgetary Board on Thursday, May 19.
The State Budget Law allocates Rp152.5 trillion for energy subsidies and compensation. With the increased economic prices of kerosene, Solar diesel, LPG, and Pertalite gasoline—assumed to have reached an ICP of US$100 per barrel, the energy subsidies will inflate to Rp208.9 trillion. The value divided for fuel and LPG will more than double, Rp149.4 trillion, and electricity will increase by Rp59.6 trillion.
As for the compensation, the increase is very high as there are goods with previously unregulated prices that are now fixed/not raised, such as Pertalite gasoline.
Therefore, Sri Mulyani asked the DPR to approve a budget increase.
"Because there are only two choices; either increase the budget or raise the prices of fuel and electricity. There are no choices in between, and that means our state budget spending is high," Sri said.
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