Until now the government has not made a final decision with regard to the implementation of the plan.
Jakarta (ANTARA News) - Finance Minister Agus Martowardojo has warned that consumption of subsidized fuel oils can rise above the quota if the plan to limit it is postponed.

Until now the government has not made a final decision with regard to the implementation of the plan and a study is still being made to see the readiness and effectiveness of the plan in Greater Jakarta, he said here on Wednesday.

He said the postponement could make the volume of subsidized oil consumption to reach above 40 million kiloliters to surpass the quota of 38.6 million kiloliters set in the 2011 budget.

He said "if the plan cannot be implemented effectively in Jakarta, Bogor, Tangerang, Depok and Bekasi it would possibly be postponed. And it is decided to be postponed the message from the finance ministry is that consumption must not surpass 38.6 million kiloliters."

He said consumption above the quota would risk fiscal resilience particularly in terms of budget subsidy and volume.

He said postponement of the plan had the potentials to increase the budget for subsidy by Rp3 trillion to Rp6 trillion.

"If it surpasses the quota I have already taken measures to provide an additional subsidy of Rp3 trillion to Rp6 trillion," he said.

The minister said there was a possibility for the plan to be postponed until July but the coverage would be wider to cover the whole Java island.

"This is still early in the year. Later if it is postponed for example until July it would cover directly the whole Java and so target will be achieved and I am optimistic," he said.

If postponement would be done his office would coordinate again with the minister of energy and other offices concerned to formulate the concept of limiting subsidized fuel oil consumption more precisely.

"The initial plan is April 1 but it has to be postponed just do it. Whether or not it will be effective I do not know as as I have not seen the results of the study," he said.

Coordinating Minister for Economic Affairs Hatta Rajasa said if the postponement was done the period would be used to formulate supervision concept to prevent users of non-subsidized to use subsidized fuels.

He said the study so far had been only on regular gas and not yet covering other subsidized fuels such as diesel oil.

"The rise in the consumption of regular gasoline happens because the number of motor vehicles is rising. So adjustment is always made every year on the rate of the rise," he said.

The chief of the team charged with studying the impact of the limitation on socio-economic conditions, Anggito Abimanyu, said he hoped the government would stick to the plan because based on the results of study it was feasible.

"They had better accept it because it is done in April which is a deflation month. I think it is already due and I can give the testimony because I have studied it myself and seen the readiness at policy-making and ground levels. But for sure let us just wait for the options that we are going to give," he said.

He said he hoped the plan could be immediately implemented because based on the results of study that would be submitted soon to the coordinating minister for economic affairs it would only need a government`s decision as preparations have been adequate in the field.

"I think it must be carried out. It is only about courage as based upon our study and preparations in the field it is feasible," he said.(*)

Editor: Heru Purwanto
Copyright © ANTARA 2011