Fuel Price Increase will Improve Infrastructure, Official Says

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  • Pembatasan Penjualan BBM Bersubsidi

    Pembatasan Penjualan BBM Bersubsidi

    TEMPO.CO, Jakarta - Jokowi-JK Transitional Team Advisor General (Ret.) Luhut Binsar Pandjaitan, said that Joko Widodo administration is set to increase subsidized fuel price by Rp 3,000 per liter in November 2014. Luhut said that the price hike will lead to a significant increase on infrastructure, education, and health budget in 2015.

    Luhut estimated that in 2015, there will be budget re-allocation of US$13 billion or Rp 158 trillion from fuel subsidy to infrastructure investment, health service, and education. The number is expected to increase to US$20 billion in 2016 and US$50 to 60 billion in 2017.

    "Having said that, economic growth of 7 percent is achievable," said Luhut.

    Moreover, Luhut also said that reducing fuel subsidy will help improve the state's financial balance, endorsing rupiah exchange value over US dollar. "I believe that once the subsidy is cut, rupiah [exchange rate] will rise," he said.