We only have two options. If subsidies are not raised, then fuel oil prices and electricity tariffs will increase, while if fuel oil prices and electricity tariffs are not raised, then subsidies will increase.
Jakarta (ANTARA) - Finance Minister Sri Mulyani Indrawati has proposed Rp74.9 trillion in additional energy subsidies for 2022 to the House of Representatives (DPR).

"We only have two options. If subsidies are not raised, then fuel oil prices and electricity tariffs will increase, while if fuel oil prices and electricity tariffs are not raised, then subsidies will increase," the minister stated at a hearing with the DPR's Budget Committee in Jakarta on Thursday.

The additional subsidies comprise fuel oil and liquefied petroleum gas (LPG) subsidies, at Rp Rp71.8 trillion, and electricity subsidies, at Rp3.1 trillion, the minister remarked.

The additional energy subsidies exclude a proposal for additional compensation funds at Rp216.1 trillion comprising Rp194.7 trillion to compensate for the fuel price hike and Rp21.4 trillion to compensate for the electricity tariff hike.

Related news: Gender equality can boost people's welfare: Finance Minister

In the meantime, the government still owed Rp108.4 trillion in compensation funds in 2021 comprising Rp83.8 trillion for the fuel price hike and Rp24.6 trillion for the electricity tariff hike.

"Overall, the additional compensation funds for 2022 will total Rp324.5 trillion," she revealed.


Related news: Indrawati highlights 15% rise in energy subsidies to Rp102 trillion

The government is expected to disburse Rp275 trillion out of Rp324.5 trillion in additional compensation funds this year, comprising Rp234 trillion for the fuel price hike and Rp41 trillion for the electricity tariff hike, Indrawati remarked.

Meanwhile, Rp49.5 trillion of the remaining compensation funds in 2022 will be disbursed in 2023 comprising Rp44.5 trillion for the fuel price hike and Rp5 trillion for electricity hike.

The compensation funds must be disbursed no later than the third quarter of 2022. Based on the regulation, the funds must be audited by the Development Finance Comptroller (BPKP).

Related news: G20 urges World Bank to ready FIF establishment: Indrawati

Related news: Minister presses for improving women's access to financial services

Translator: Agatha Olivia V, Suharto
Editor: Fardah Assegaf
Copyright © ANTARA 2022