"We appeal for support from the people and their understanding," finance minister Agus Martowardojo said in a meeting with the House of Representatives` Budget Committee here on Monday.
He said the government proposed the option because it wished to restrict the use of subsidized gasoline and reduce subsidy in the budget.
"With the Indonesian Crude Price assumed at US$105 per barrel and a quota of 40 million kilo liters (for subsidized gasoline) the oil subsidy would rise drastically to Rp178 trillion. This must be put under control. We wish to reduce the oil subsidy risk at a maximum of Rp137 trillion," he said.
The minister also said that the oil price hike was also important for preventing smuggling as the cheapest price of gasoline in neighboring counties is already at a range of Rp12,000 to Rp14,000.
"This will be risky as it could make people who have used non-subsidized pertamax gasoline to return to subsidized premium gasoline," he said.
The discussions between the government and the House Budget Committee since Thursday had produced two options with regard to subsidized gasoline.
The first option is fixing the subsidy at Rp225 with a consisting of Rp137 trillion for oil fuel subsidy, Rp64.9 trillion for electricity subsidy and Rp23 trillion for fiscal risk reserves.
This option also requires the revocation of Article 7 paragraph 6 of Law Number 23 of 2011 on the 2012 budget prohibiting the government to raise the price of subsidized gasoline.
With the revocation of the article the government is given an opportunity to adjust the price of subsidized gasoline by increasing it by Rp1,500 per liter to Rp6,000 per liter.
The second option meanwhile is fixing the subsidy at Rp178 trillion. The subsidy for electricity remains at Rp64.9 trillion while the risk reserves at Rp23 trillion to make the total subsidy to reach Rp266 trillion.
With the second option the price of subsidized gasoline would not be raised.
The finance minister said the government would not choose the second option because it has the potential to increase the budget deficit to above three percent to run against Law Number 17 of 2003 on state finance.
He said the second option also has the potential to increase the fuel oil quota to 47.8 million kiloliters up from 40 million kiloliters before.
All factions in the Budget Committee supported the option to raise the price of subsidized gasoline except the Indonesia Democratic Party Struggle (PDIP), Gerindra and Hanura party factions.
Gerindra and Hanura faction members even walked out of the meeting in protest against the government and majority factions who would not discuss the second option.
"Allow us with all due respect to leave the room and not to participate in the discussion of the fuel price if the meeting continued to only discuss the first option," Gerindra faction leader Fary Djemi Francis said.
He said Gerindra would present its stand on the option to raise the fuel price at the plenary session scheduled on March 29.
Hanura faction member Ali Kastella meanwhile said Hanura would wait for a vote in the plenary meeting and would ask against the revocation of Article 7 paragraph 6.
"Hanura remained consistent and would for a vote on the issue in a plenary session because it is not true that the deficit would surpass three percent when the fuel price is not raised," he said. (*)
Editor: Kunto Wibisono
Copyright © ANTARA 2012
