"More funds could then be reallocated to infrastructure development and education, among other things, in provinces across the nation," Suryo said.Jakarta (ANTARA News) - The Chairman of the Chamber of Commerce and Industry of Indonesia, Suryo Bambang Sulisto, has stated that the government should revoke subsidies for fuel and reallocate the funds to infrastructure development and education in provinces across the country.
"More funds could then be reallocated to infrastructure development and education, among other things, in provinces across the nation," he said here on Wednesday.
According to Suryo, energy subsidies burden the state budget and hamper economic growth. This year, energy subsidies have reached Rp274 trillion and their implementation costs may exceed Rp300 trillion.
Therefore, the government should revoke the Rp150 trillion worth of fuel subsidies and reallocate more funds to development projects across Indonesia.
"The additional funds that will be available after the revocation of subsidies can be used for the development of health, infrastructure and job sectors. However, the local governments must also submit their proposals on how they would like to use the additional funds," Suryo said.
"Subsidies for regional development would be more beneficial than fuel subsidies," he pointed out.
According to Suryo, 80 percent of subsidized fuel is used up by the rich, who are actually not entitled to such subsidies.
"Therefore, if the fuel subsidies are revoked, there will be 50 percent increase in the prices of such fuels," he noted.
Earlier, Chairman of the Indonesian National Economic Committee Chairul Tanjung stated that private car users were not entitled to subsidized fuel, because it was meant to be used only by low-income groups.
"The Committee recommends revoking fuel subsidies for private cars," he said here on Monday.
Chairul expressed hope that the proposal would be accepted by the government, because the regulation to ban private car users from consuming subsidized fuel was also aimed at reducing the consumption of premium (subsidized) gasoline and diesel.
"This will be better than raising prices by Rp1,500-Rp2,000 per litre. Besides, its effect on inflation would also be less," he pointed out.
"The proposal must be passed because 70 percent of the users of premium gasoline and diesel are middle- to upper-class people, who have a personal vehicle," Chairul added.
Indonesia`s subsidized fuel quota has been set at 46 kilolitres for 2013, up 6 million from last year`s 40 million kilolitres. Meanwhile, the budget for fuel subsidies reached Rp 220 trillion. (*)
Editor: Heru Purwanto
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