"The President wishes to assure that the calculation is right and the implementation is smooth while compensation must reach the target," he said following a meeting on the issue at the presidential palace in Cipanas, Bogor, West Java.
He said the use of subsidized gasoline must be curbed to reduce fiscal pressure so that the budget will remain sound.
The quota of subsidized gasoline has been set at 46.01 million kiloliters in the 2013 budget with a subsidy of Rp193.8 trillion.
The subsidy is expected to swell and disrupt the 2103 budget unless consumption is curbed.
Energy minister Jero Wacik meanwhile said that the government plans to raise the price of the subsidized gasoline for private cars as one of the ways to control its use.
Motorbikes, public transport cars and cargo vehicles meanwhile would remain to be subsidized or may still buy gasoline at a subsidized price of Rp4,500 per liter.
He said this was the option that the government would likely take soon.
"When exactly it would be implemented still has yet to be discussed but it would be made known in time," he said.
He meanwhile said that the option of producing a new type of gasoline like Ron 90 was considered ineffective. "Its implementation would be difficult," he said.
Coordinating minister for people`s welfare Agung Laksono meanwhile said that the government is still seeking the right scheme to compensate for its plan to reduce gasoline subsidy.
Coordinating minister for economic affairs Hatta Rajasa said the government would choose the best option which would not burden the people but maintain the fiscal conditions to remain well.
"We have not yet come to a decision," he said after the meeting.
He said rising the price was not the main option as the government has to give compensation in the form of cash in exchange for that and its procedure is complicated.
He explained if the government raised the oil price it had to give people BLT (cash handout) as a compensation and for it permission is needed from the parliament and so the resistance would be strong to make the option not eligible.
Hatta assured that the discussion would be finished before the end of the month so that any option that would be taken could be immediately implemented.
The acting head of the fiscal policy of the ministry of finance, Bambang Brodjonegoro, meanwhile hoped that any policy that would be taken must be able to reduce the budget deficit below 2.5 percent.
He said the potential for the deficit to swell outside the target set at Rp274.7 trillion in the budget was big while tax revenues were not yet optimum.
The finance ministry predicts the oil subsidy could reach Rp300 trillion and the bugdet deficit could surpass 1.65 percent of the GDP unless oil consumption is not curbed, he said.
reporting by Satyagraha, Wuryanti
(H-YH/A014)
Editor: Jafar M Sidik
Copyright © ANTARA 2013
