"If the plan is only to save less than Rp5 trillion in fuel subsidy the government should abandon it as its economic impact will be small while its political impact will be huge," Deputy Chairman of the House of Representatives (DPR) Commission XI Achsanul Qosasi said on Thursday.
Both the government and the House have agreed to set fuel subsidy at Rp93 trillion under the 2011 state budget. The figure is expected to soar as the global crude oil prices hit US$100 a barrel.
"The Energy and Mineral Resources Ministry should take immediate steps with regard to the retrenchment program," he said.
Last year, private cars` subsidized fuel consumption reached 14 million kiloliters worth about Rp28 trillion. However, the plan to deprive private cars of subsidized fuels would likely become a topic of public debate that might discredit the government, he said.
"In my view, it would be better to raise fuel prices little by little so as not to cause protracted unrest. Limiting the use of subsidized fuels will only give rise to prolonged unrest," he said.
In December 2010, the government and the House agreed to delay the implementation of the plan from early January to the end of the first quarter of 2011.
The government claimed that the limitation of the sale of subsidized fuels may save the state Rp 3.8 trillion this year.(*)
Editor: Aditia Maruli Radja
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