Minister denies compensation for fuel price hike politically motivated

Senin, 27 Mei 2013 | 10:38

Energy and Mineral Resources Minister Jero Wacik has denied that the government`s plan to compensate the poor for an imminent rise in the price of subsidized fuels was politically motivated ahead of the 2014 elections. "The plan to raise the price of fuel oils is purely related to high fuel subsidy which leads to a surge in budget allocations for fuel subsidy, while most of fuel subsidy recipients are middle-and high-class people," he said here on Thursday night.

Under the plan for subsidized fuel price hike, the government has set aside budget funds to compensate the poor, he said.

"The fuel price hike will no doubt have an impact on the economic condition of the poor as a result of inflation. Therefore, the government has planned compensation funds to address the problem," he said on the sidelines of a national congress of the National Oil and Gas Businessmen Association (Hisnawa Migas).

He said the compensation funds are still being discussed at the House of Representatives (DPR) in the draft revision of the state budget.

"The compensation will come in the form of cash handouts, scholarships for poor students, and an increase in the amount of subsidized rice for the poor," he said.

He said the government is certain to raise the price of subsidized fuels.

"Once the draft revision of the state budget is endorsed the government will announce the fuel price hike and the compensation funds will be distributed among the poor on the following day," he said.