RI govt also affected by fuel oil price increase

RI govt also affected by fuel oil price increase

Jero Wacik. (ANTARA)

Jakarta (ANTARA News) - Energy and Mineral Resources Minister Jero Wacik said, besides the people, the government would also be affected by a fuel oil price increase.

"The government will bear the burden of the state budget as a result of the increase in the world crude price," the minister said here on Wednesday.

Jero Wacik has submitted to the House of Representatives (DPR) the government`s plan to raise the price of subsidized fuel oils to the House`s Commission VII on energy affairs.

The government had two options of oil price increase, namely an increase by Rp1,500 per liter or a fixed subsidy of Rp2,000 per liter.

He said the government would ask for the approval of the DPR over one of the two options.

The government needs to raise fuel oil prices because the world crude price is expected to hover at a high level in the future that would burden the budget.

Therefore, the minister said, the government will cancel non-essential programs.

Besides, the government will also prepare a number of compensation schemes for the people who will be affected by the fuel oil price increase, he said.

The minister said that in January 2012, the Indonesian crude price (ICP) was recorded at an average of US$115 per barrel.

In February, it rose to US$121 per barrel.

"The realization of the ICP is already far from the assumed US$90 per barrel as set in the state budget. So, the price of fuel oils must be increased," he said.

For the diesel oil type, the government is proposing an increase to Rp6,000 per liter. "We have once had a price of Rp6,000 per liter," he said.

The other option is that the government provide a fixed subsidy of Rp2,000 per liter which is intended to prevent fluctuations of prices in the state budget, the minister added.