"This subsidy fund will indeed still be partaken by those who have cars. So, indeed, subsidies through commodities, such as fuel, it is inevitable that these would be taken in by groups who have vehicles that consume these subsidies," she added at the Merdeka Palace here on Saturday.
At a press conference attended by President Joko Widodo the same day, Energy and Mineral Resources Minister Arifin Tasrif announced an increase in the price of subsidized Pertalite fuel from Rp7,650 per liter to Rp10 thousand per liter; subsidized diesel from Rp5,150 per liter to Rp6,800 per liter; and Pertamax non-subsidized fuel from Rp12,500 per liter to Rp14,500 per liter.
The new prices became effective from 2.30 p.m. local time on Saturday (September 3, 2022).
"So, if the subsidies are through commodities, what I said earlier is that with the increase in the price of fuel by around US$100, or even if it drops to US$95, the amount of fuel and electricity subsidies will still amount to Rp647 trillion, or Rp653 trillion if it decreases slightly just like now until December," she elaborated.
The government has provided social assistance to promote better justice for the lower socio-economic groups.
"Earlier, Mrs. Risma (Social Affairs Minister) said 20.67 million were the poorest 30 percent; then as per Mrs. Manpower Minister, 16 million covered almost 50 percent of the people in the lowest economic position," the minister noted.
The government has allocated Rp24.17 trillion from the transfer of fuel subsidies for providing three types of social assistance. First, direct cash assistance totaling Rp12.4 trillion for 20.65 million community groups, with each recipient entitled to assistance of Rp150 thousand, which will be provided four times.
Second, wage subsidy assistance totaling Rp9.6 trillion for 16 million workers earning a maximum salary of Rp3.5 million per month, with each recipient entitled to a single-time assistance of Rp600 thousand.
Third, assistance from regional governments for the transportation sector such as public transportation, motorcycle taxis, fishermen, and additional social protection assistance using 2 percent of general transfer funds—the General Allocation Fund and Revenue Sharing Fund of Rp2.17 trillion.
However, the minister has yet to disclose whether the social assistance will be continued until 2023 or not.
"The state budget law is still being discussed with the House of Representatives. We proposed a fuel subsidy of Rp336 trillion and with the increase that was announced earlier, it is possible that there will still be an additional Rp100 trillion due to an underpayment (that will be included in) 2023. So, this will be discussed later by us with the House of Representatives for the 2020 State Budget Law, discussion on which will be concluded at the end of September," she informed.
However, she emphasized that President Widodo has stated in the financial note of the 2023 State Budget Bill that Rp336 trillion has been reserved for fuel subsidies.
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Translator: Desca L N, Mecca Yumna
Editor: Rahmad Nasution
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