"The economy continues to grow. A great number of vehicles also keep on increasing. Let us be serious in saving fuel oil consumption so that the state budget and the environment could be preserved," the President said on Twitter on Thursday.
The government is currently discussing the Draft 2013 Revised State Budget that would be submitted to the House of Representatives (DPR). It included a proposed cut in fuel oil subsidy which would consequently lead to increases in the prices of premium gasoline and diesel oil.
Late last month when opening a national development planning meeting, the President said that the government had to cut fuel oil subsidy to maintain budget stability and alleviate the state budget burden.
"To be frank, the state budget is less sound and less secure. If not improved, our budget deficit will exceed three percent and violate the law. With a big deficit, our economic resilience will be disturbed," he said.
He said that the budget burden as a result of subsidy, particularly fuel oil subsidy, had increasingly become bigger and had the potential to disturb the fiscal conditions.
He said that state revenues in the 2013 State Budget were set at Rp1,529.7 trillion with state expenditure set at Rp1,683 trillion.
This leaves a deficit of Rp153.3 trillion, or 1.65 percent of the gross domestic product (GDP).
Of the 2013 Stage Budget, some Rp317.2 trillion was set for subsidies of which Rp193.8 trillion for fuel oil.
"If not controlled, total subsidies could reach Rp446.8 trillion and fuel subsidy could reach Rp297.7 trillion. This could increase the deficit to reach Rp353.6 trillion or about 3.83 percent of the GDP.
He said that the relatively big subsidy for fuel oil reduced the budget set for improving the people's welfare and reducing poverty. It also restricts the funds for infrastructure development.
Therefore, the subsidy for fuel oils must be cut, the president said.
Earlier, President Yudhoyono said the government will increase the prices of subsidized fuel oils after the DPR has endorsed the revision of the 2013 state budget.
The President said approval of the revised 2013 state budget is needed because it is related to budget allocations to compensate the low-income people for fuel price hikes.
(A014)
Editor: Jafar M Sidik
Copyright © ANTARA 2013
