Postponement of fuel consumption cuts to burden budget Rp6 trillion

Postponement of fuel consumption cuts to burden budget Rp6 trillion

Agus Martowardojo. (FOTO ANTARA/Maha Eka Swasta )

Jakarta (ANTARA News) - Finance Minister Agus Martowardojo said postponement of subsidized fuel oil consumption cuts would increase subsidy in the state budget amounting to Rp6 trillion.

"It has the financial consequence of increasing subsidy between Rp3 trillion to Rp6 trillion per annum," the finance minister said here on Thursday.

He said that the figure was based on the world`s oil price assumption at US$80 per barrel. "In general, we have the budget reference of the Indonesian Crude Price (ICP) at US$80 per barrel. We still have no plan to revise the assumption," the minister said.

Agus however said that the government continued to monitor the developments of the world oil prices. "Especially, the fragile political conditions in the Middle East," he added.

In his remarks to reply the press about the possible postponement of subsidized fuel oil consumption limitation, the minister said that the matter was good for preparing the imposition of the fuel oil cut policy not only in Jakarta and its buffer zone cities but also in all Java.

He said that the policy would be implemented in an effort to ensure that only those who deserve it, namely people in the middle and lower brackets, would enjoy subsidized fuel oil.

"Possibly, limitations will later be imposed not only in Jakarta and its neighboring cities but also in all Java areas," he said.

He said that many people who actually belonged to the middle and upper economic classes also enjoyed the subsidy.

The minister said his ministry still hoped that the government would go ahead to cut subsidized consumption in order not to increase the subsidized fuel oil volume to 38.5 million kiloliters.

"If it is delayed it must be because the government is not yet convinced with the effectiveness and feasibility of the study. But we in the finance ministry have made a schedule for the subsidy cuts. The cuts in the sense that the limitation program should not exceed 38 million kiloliters," he said.
(Uu.A014/HAJM/P003)

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