VIVAnews - Although the crude oil price has climbed to the level of US$ 80 per barrel, the government assured there would not be any fuel price increase this year. The government will also try to keep the price stability in order to protect people’s purchasing power by raising the amount of subsidy in the 2010 State Budget.
“The matter of energy subsidy, which is the fuel, has been discussed because there will be no fuel price hike,” Finance Minister Sri Mulyani said at the President’s office on Tuesday, January 12.
According to her, the absence of fuel price increase would lead to the rise of subsidy for fuel, LPG and bio-fuel from Rp 68.7 trillion to Ro 28.1 trillion. “It must be accommodated due to the change in international oil price,” the Minister said.
The Public Service Obligation (PSO) for electricity will also go up Rp 15.4 trillion from Rp 37.8 trillion to Rp 53.2 trillion because of several changes from its fuel input.
The hike in fuel and electricity subsidy has caused Rp 43.5 trillion escalation in the budget. However, the government will be getting additional revenue from the oil price increase of Rp 39 trillion.
In order to stabilize the price of food products, the government would raise the amount of rice for the poor (raskin) from 13 kg to 15 kg with the same price. The government will also change the number of fertilizer subsidy which would provide Rp 8.2 trillion additional fund.
Food product subsidy will be given Rp 3.4 trillion additional fund for raskin and cooking oil and sugar stabilization. Meanwhile, fertilizer subsidy will receive Rp 4.4 trillion additional fund.
Therefore, the total amount of non-energy subsidy, which is the one for food products and fertilizer, will go from Rp 51.3 trillion to Rp 59.5 trillion. “That’s the government’s main priority to stabilize the prices amid the increasing price of commodities in the international level and high pressure towards the people,” Mulyani said.
The government’s second priority is to overcome electricity issues. Thus, aside from providing additional fund for electricity subsidy, the government would also obtain loans from the State Electricity Firm (PLN) to buy new transformers to replace the broken ones.
Another priority is allocating additional budget for the Department of Law and Human Rights to build new jailhouses. Among other priorities are assigning athletes to compete in Sea Games, setting residential administration system, and providing financial support for military members and civil employees assigned on small and outer islands as well as in frontier areas.
In term of infrastructure, the government will allocate additional budget to buy lands from the Public Service Agency (BLU) at the Public Works Department to speed up the construction of 21-segment toll road and support sugar factory revitalization program which is the Industry Department’s priority program.
“These are some of the government’s spending priorities in order to enable the 2010 State Budget coping with dynamic challenges in our economy,” Mulyani said.
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Translated by: Nataya Ermanti
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