Fuel subsidy could be raised for the poor

Senin, 10 September 2012 | 10:23

Head of the Fiscal Policy Agency of the Finance Ministry Bambang Brodjonegoro said oil fuel subsidy could be increased for those deserving subsidy."Subsidy should be more for those deserving subsidy," Bambang said here on Thursday.

He said subsidy is not fairly distributed resulting in growing gap between the poor and the rich.

Under the present system the one to gain more from fuel subsidy are rich people especially industrialists.

Bambang said subsidy is needed to maintain the purchasing power of the people and to sustain the role of household consumption as an economic growth driver.

Household consumption has become one of the main drivers of the country`s economic growth in the past years especially amid the global economic slowdown.

"Oil fuel subsidy has positive side to boost the household consumption as a growth driver, but certainly not optimal," he said.

He said high imports of crude oil and oil products have put pressures on the country balance of payments.

Oil fuel consumption needs to be controlled , but price increase is only one of the instruments, he said.

The Finance Ministry has proposed an increase in the oil fuel subsidy from Rp137.4 trillion this year to Rp193.8 trillion in 2013.

An increase is required because of the growing consumption of oil fuels , up around 8 percent a year.

"Next year the oil fuel quota will likely reach 45 million to 46 million kiloliters based on the annual growth of 8 percent in consumption," Bambang said.

source http://www.antaranews.com