House of Representatives Agrees to Adjust Budgets for Energy
- VIVA/Anisa Aulia
VIVA – The Budget Committee of the House of Representatives or locally known as DPR has agreed to the proposal of Minister of Finance, Sri Mulyani Indrawati to adjust subsidies and compensation for the energy sector.
Previously, the Minister of Finance, Sri Mulyani Indrawati submitted a proposal to adjust the subsidy burden and compensation for the energy sector and received approval from the House of Representatives Budget Agency.
The proposal was made to respond to the increase in commodity prices as the Government remains consistent to maintain economic recovery and protect people’s purchasing power by keeping the State Budget healthy and sustainable.
“Because there are only two choices. If [the subsidy] is not increased, the prices of fuel and electricity will rise. If fuel and electricity [prices] do not increase, the subsidy does,” Sri Mulyani said at the working meeting of the DPR Budget Committee and Ministry of Finance on Thursday, May 19, 2022 at the House of Representative Budget Committee Meeting Room in Senayan, Jakarta.
The assumption of the Indonesian Crude Price (ICP) used in the 2022 State Budget is US$63 per barrel. However, the Minister of Finance said that currently the ICP value is above US$100 per barrel, which is US$102.5 per barrel. Rising oil prices and the absence of a price adjustment policy have led to a significant increase in the burden of subsidies and compensation.
“The economic price of our fuel has seen a drastic change. The economic price is way beyond the assumed price or the price used to allocate State Budget subsidy for kerosene, diesel fuel, LPG, and Pertalite fuel,” said Sri Mulyani.
Motor Isi Bensin di SPBU.
- Antara.
With the gap between the retail selling price of fuel and the economic price, the Government is committed to maintaining the supply and prices of fuel and LPG that are affordable to the public.
