JAKARTA: Indonesians must prepare for any hike in gas prices as the authorities looks to control the ballooning energy subsidies amid high worldwide oil prices, the cabinet minister mentioned on Friday (Aug 12).
Southeast Asia’s biggest economy has tripled this year’s power subsidy budget in order to 502 trillion rupiah (US$34. 22 billion) in order to keep some energy prices and strength tariffs unchanged plus manage inflation.
However , this may not be sufficient, as nearly all from the subsidised fuel contingent has already been used, according to the finance ministry.
Indonesia’s Investment Minister Bahlil Lahadalia said if the government has to increase the quota meant for subsidised gasoline in order to 29 million kilolitres from 23 mil kilolitres, and presuming oil prices stay elevated and the rupiah weak, the subsidy bill could increase to up to 600 trillion rupiah.
“Please convey towards the people that my sensation is we have to be prepared in case a fuel price hike occurs, ” Bahlil informed a news meeting, noting that it was fiscally unwise to spend 25 per cent of govt revenues on financial assistance.
“The burden on the state will be high. Maybe this really is momentum for us to operate together to keep our fiscal (position) healthful, ” he additional.