Gov’t to Announce Fuel Policy Soon

Senin, 08 April 2013 | 09:53

The government will soon announce the policy over the fuel subsidy. From several options that are being reviewed, there is a strong indication that fuel subsidy for rich people will be revoked. President Susilo Bambang Yudhoyono stated that the government continues to work in marathon to ensure the social cost and economic cost from the reduction of fuel subsidy and whatever taken can be managed properly.

Based on the President’s statement, the government is reviewing at least two major options. First option is reducing the subsidy by cutting the fuel subsidy for rich people. Second, increasing the fuel prices but it must be followed by a compensation for the poor.

President SBY conveyed these options during a meeting with editorial head of mass media at the residence of the Industrial Minister M.S. Hidayat, Saturday (3/6) night.

The Chief editors who attended the meeting, among others, were Wahyu Muryadi (Tempo) as the Chairman of Chief Editor Forum, Rikard Bagun (Kompas), Arif Budisusilo (Bisnis Indonesia), Don Bosco Salamun (Berita Satu), Primus Dorimulu (Suara Pembaruan), Ahmad Kusaeni (Antara), Syamsuddin Haessy (Jurnas), Arifin Asydhad (Detikcom), Suryopratomo (MetroTV News Director), and Nasihin Massa (Republika).

Minister of Energy and Mineral Resources Jero Wacik, Defense Minister Purnomo Yusgiantoro, Deputy Secretary of Defense Syafri Syamsuddin, and the President's special staffs Julian Aldrin Pasha and Firmansah were also present in the meeting.

According to President Yudhoyono, the increase or decrease of fuel prices is equally detrimental to the poor. “I am therefore very concerned with social cost and economic cost. For demonstrations, it would subside within one or two weeks.”

With that experience, the President continued, if there is no other option and the current fuel prices need to be increased, there should be a compensation for the poor.

Many analysts said that the House wouldn’t approve compensation for the poor because it can be used as government’s advantage towards national election.

Therefore, if the option to raise fuel price must be taken, said Yudhoyono, “I will fight with the House to approve compensation for the poor.”

Yudhoyono said if fuel price to be increased, but the House refuses the compensation, it’s like hitting the poor twice, “I am from poor family, I know what it means if the rice price raise IDR500 and transport fare increase IDR500,” he said.

Besides raising fuel price, the President said subsidy for the wealthy will be revoked. “Those who are rich and capable don’t need subsidy. The poor are subsidized according to state’s ability, justice for all people,” he explained.

According to the President, premium economic price is IDR9,000 per liter or it’s twofold higher than subsidized price at IDR4,500 per liter. If the impact is burdensome, we can apply transition price ranging at IDR6,000 or IDR7,000 per liter. “These are options of existing policy,” he said.

Otherwise, according to Yudhoyono if the indicators of IDR exchange rate, stock index, budget deficit showed yellow to red alert, the Government will increase fuel price immediately.

That step will be taken considering fuel subsidy in State Budget continue swollen up to IDR300 trillion this year. “I’m fully aware for the situation, let’s try to revoke subsidy for the wealthy, while the poor are still subsidized with control, restrictions and others.”

According to the President, the policy options will be selected and will be announced soon. “I will carefully calculate the economic cost, social cost and its security dimension,” he said.

While Minister of Energy and Mineral Resources Jero Wacik said the efforts have been made by limiting subsidized fuel consumption for red-plate cars, plantation sector vehicles, state-owned vehicles and others, did not provide significant result for subsidy reduction.

Therefore, the Government will seek more effective way to reduce subsidy without burden the poor. “We will announce it,” he said. (aph)

by Arsyad Paripurna, Elok Ani Riani, Arief Budisusilo