Minister: Energy Subsidy Budget to Keep Soaring
Minister of Finance Sri Mulyani delivers a statement on the transfer of fuel subsidies, Saturday (09/03), at Merdeka Palace, Jakarta. (Photo by: BPMI of Presidential Secretariat/Lukas)
Following the Government’s fuel price adjustment, Minister of Finance Sri Mulyani Indrawati stated that she will continue to calculate the subsidy budget and energy compensation for 2022 as the Indonesian Crude Price (ICP) continue to fluctuate.
Previously, through Presidential Regulation Number 98 of 2022, the Government increased the energy subsidy and compensation budget three times. Subsidies for fuel and LPG increased from Rp77.5 trillion to Rp149.4 trillion and electricity subsidies from Rp56.5 trillion to Rp59.6 trillion. Meanwhile, compensation for fuel from Rp18.5 trillion to Rp252.5 trillion and compensation for electricity rose from zero to Rp41 trillion.
“So, the total subsidy and compensation for fuel, LPG, and electricity reach Rp502.4 trillion,” the Minister said.
The Minister went on to say that this figure of Rp502.4 trillion was calculated based on the average ICP which could reach US$105 per barrel at an exchange rate of Rp14,700 per US$ and the volume of the subsidized RON-90 fuel pertalite and subsidized diesel which are estimated to reach 29 million kiloliters and 17.44 million kiloliters, respectively.
“Even with the ICP dropping to US$90 [per barrel], the one-year average price is still at US$98.8 or almost US$99 [per barrel]. Even if the price of oil drops below US$90 [per barrel], the yearly average of ICP is still at US$97 [per barrel],” she said.
Based on the calculation, the subsidy will still increase from Rp502 trillion to Rp653 trillion if the ICP is at an average of US$99 per barrel or to Rp640 trillion if the ICP is at US$85 per barrel until December 2022.
“There is an increase of Rp137 trillion or Rp151 trillion depending on the ICP. We must continuously monitor the development of the ICP because the geopolitical atmosphere and the world economic projections will still be very dynamic,” she remarked. (SLN/UN) (FI/MMB)
