Govt Talks of Hike in Subsidized Fuel Prices

TEMPO.CO, Jakarta - Deputy Finance Minister Suahasil Nazara said the government has not yet decided to increase the prices of subsidized fuel as it is still monitoring the price fluctuations of global oil.

“Fuel prices fluctuate. We are facing tremendous uncertainty. Let’s see,” said Suahasil to Tempo at the Financial Services Authority (OJK) building, Central Jakarta, Monday, August 15, 2022.

Suahasil said the government had earmarked the budget for fuel subsidy and compensation totaling Rp502 trillion this year. The budget has swelled from the initial Rp170 trillion.

The budget hike has been approved by the Budget Agency of the House of Representatives (DPR). The government, he emphasized, is committed to maintaining the budget within the established corridor.

However, the government will conduct further analysis to make policy if the need for fuel subsidies soars again. Moreover, economists have estimated that the fuel subsidy could reach Rp600 trillion this year if the distribution is not restricted.

“The state budget has corridors to allocate. We will analyze the price later. The policy will be adjusted,” said Suahasil.

He added that the government is trying to increase subsidies and compensation for fuel to withstand the fluctuating prices of goods in the country. He did not deny that the escalation of energy prices has affected a number of business activities, including construction projects. But he ensured that large government projects, especially the state strategic projects, would not stagnate.

The quota of subsidized fuel is predicted to exceed given that the consumption of Pertalite fuel has reached 16.8 million kiloliters as of July 2022, or 73.04 percent of the set quota of 23 million kiloliters. The remaining quota of 6.2 million kiloliters is expected to run out by October.

FRANCISCA CHRISTY ROSANA 

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