"If fuel subsidy is not reduced, our budget will increase by more than three percent, and with a big deficit, our economic security will be disturbed," the president saidJakarta (ANTARA News) - Fuel subsidy must be reduced to maintain budget stability and to diminish the burden of state budget, President Susilo Bambang Yudhoyono said here on Tuesday.
"If fuel subsidy is not reduced, our budget will increase by more than three percent, and with a big deficit, our economic security will be disturbed," the president said when opening the National Development Planning Meeting.
The head of state noted that subsidy funds, especially for fuel oil, was getting bigger and potentially disrupt fiscal health.
He explained that from the draft state budget 2013 with the revenue of Rp1,529.7 and state expenditures amounted to Rp1,683 trillion, there would be a deficit of Rp153.3 trillion or 1.65 percent of the gross domestic product.
President Yudhoyono added that based on state budget 2013, the funds for total subsidy would reach Rp317.2 trillion while for fuel subsidy would be Rp193.8 trillion.
"If we fail to control it, the total subsidy will reach Rp446.8 trillion and for fuel subsidy alone it can reach Rp297.7 trillion. It means we will have a deficit of Rp353.6 trillion or 3.83 percent of the gross domestic product," the president noted.
"Huge fuel subsidy will make the amount of funds for people`s welfare, reducing the poverty rate, and infrastructure development becomes smaller and smaller," he went on.
Therefore the head of state that the reduction of fuel subsidy will be inevitable in the near future.(*)
Editor: Heru Purwanto
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