Jokowi to Divert Fuel Subsidy to Other Sectors

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    TEMPO.CO, Jakarta - President-elect Joko "Jokowi" Widodo, ensured that he will redirect funds initially allocated for fuel subsidy to other productive sectors. "As we know, 70 percent of fuel subsidies are enjoyed by car owners," he said yesterday.

    In the 2015 State Budget Draft, the government proposed a total of US$ 24.8 billion to be allocated for fuel subsidy, a number that is higher compared to the fund allocated in the 2014 State Budget, which is US$ 21 billion. Meanwhile, the amount of budget allocated for electricity subsidy will be reduced to US$ 6.2 billion from the current US$ 8.8 billion stated in the 2014 State Budget.

    Jokowi said that the diversion of fuel subsidies will be done not only by increasing the price of fuel. He explained that the new government is still on the process of calculating budget savings and the use of alternative energy that concerns economic and social aspects, such as the conversion of oil powered power plants to gas or coal.

    Deputy Chief of the United Development Party (PPP) Suharso Monoarfa, said that PPP supports the government’s plan to cut fuel subsidies in order to maintain the State Budget. Ahmadi Noor Supit from the Functional Group (Golkar) Party, said that subsidies need to be re-evaluated because it has failed to reach the intended target.