"In regard to the plan to cut fuel subsidy, the government is preparing three programs to compensate the poor," he said here on Wednesday.
The government feared that the inflationary impact of the subsidized fuel price hike will affect the poor, he said.
"Although we predict that it will have no significant impact on the poor, the impact however small, will affect the performance to reduce poverty rate," he said.
For its part, the government will compensate the poor by providing them with conditional cash handouts, he said.
"The compensation will not come in the form of cash handouts but conditional cash handouts," he said.
The conditional cash handouts include accelerated and expanded social protection programs which refer to the existing programs, he said.
The programs include subsidized rice for the poor and scholarships for poor students, he said.
President Susilo Bambang Yudhoyono has hinted that the government will soon issue a reduced fuel subsidy policy by raising the price of subsidized fuel sold to the rich.
The government is preparing a scenario to raise the price of subsidized gasoline and diesel oil for private cars from Rp4,500 to Rp6,500 a liter effective May 2013.
However, the price of subsidized fuel for motorcycles and public transport modes remain unchanged at Rp4,500 a liter.
If the price of subsidized fuel for private cars is to be raised in May, the country will save an estimated Rp21 trillion in fuel subsidy this year.
Reporting by Wuryanti Puspitasari/A014)