The government was proposing additional subsidy because there were changes in the assumptions of the rupiah exchange rate and oil prices.
Jakarta (ANTARA News) - The government has proposed additional electricity subsidy of Rp8.61 trillion to the House so that electricity subsidy in the 2013 Revised State Budget will reach Rp87.24 trillion, increasing from the previously set at Rp78.63 trillion.

Electricity Director General of the Ministry of Energy and Mineral Resources (ESDM) Jarman told a hearing with Commission VII of the House of Representatives (DPR) on the draft revised state budget here on Thursday that the government was proposing additional subsidy because there were changes in the assumptions of the rupiah exchange rate and oil prices.

"Additionally, the volume of fuel oil consumption is also raised due to a number of reasons," the director general said.

According to Jarman, in the 2013 State Budget, the exchange rate of the rupiah currency against the US dollar was set at Rp9,300 and the Indonesian Crude Price (ICP) at US$100 per barrel.

In the meantime, in the 2013 Revised State Budget the exchange rate was set at Rp9,600 per US dollar and the ICP at US$108 per barrel.

Consumption of fuel oil is estimated to increase from 5.67 million kiloliters in the 2013 State Budget to 6.27 million kiloliters in the 2013 Revised State Budget.

The increase in the fuel consumption is caused by among others the delay in the construction of a number of power plants. After all, the Java-Bali submarine cable projects are also delayed from December 2012 to mid 2013.

By moving backward of the project schedules, power plants` fuel consumption in Bali will increase.

Jarman also explained the sensitiveness of the ICP and the rupiah exchange rate against the greenback towards sales` main cost (BPP) and electricity subsidy.

He said that with the rupiah exchange rate set at Rp9,300 and ICP at US$100 per barrel, the BPP would be Rp1,160 per kWh and subsidy at Rp80.06 trillion.

If the rupiah`s exchange rate is set at Rp9,600 and the ICP US$108, the BPP would reach Rp1,198 per kWh and electricity subsidy Rp87.24 trillion.

"Thus, with the change in the rupiah exchange rate and in the ICP, subsidy will increase by Rp7.18 trillion," Jarman said.(*)

Editor: Heru Purwanto
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