"The opportune moment to announce the fuel price policy is right after Jokowi and JK are inaugurated," Economist Dr Nugroh of the Economic Faculty of the University of Diponegoro in Semarang, Central Java, said on Thursday.
He said that the announcement of fuel price policy is important because it was believed that the budget for fuel subsidies in the coming five years will continue to increase.
The subsidy reduction policy has become a hot topic for the newly elected president because it is almost impossible to avoid increasing fuel prices amid the swallowing of subsidies, which has reached about Rp300 trillion in the 2014-2015 period.
Meanwhile, the increase in fuel consumption at home is not in line with the increase in domestic oil production, which is only about 870,000 barrels per day.
Fuel consumption in 2014 is expected to reach 48 million kiloliters, Nugroho said.
He said the president-elect had no other option than to reduce subsidies by raising fuel oil prices.
The question is how much price should be raised, so that subsidies could be reduced without burdening people.
"I believe an increase of Rp500 per liter of premium gasoline will be realistic," he added.
Meanwhile, the Jokowi-JK pair has to wait for the decision of the Constitutional Court (MK) over the presidential election dispute, which was filed by competitor Prabowo Subianto-Hatta Rajasa duo.
Jokowi-JK pair won the July 9 presidential election based on the announcement of the General Elections Commission (KPU) on July 22. If it wins the dispute, Jokowi and Kalla will become the next president and vice president, respectively, on October 20, 2014.
Nugroho said after the inauguration, the two leaders should explain that the revenue from fuel price rise will be used in developing educational program, health, and infrastructure.
(A014/INE)
EDITED BY INE
(KR-BSR/A014)
Editor: Jafar M Sidik
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