Press Statement of President of the Republic of Indonesia Regarding Reallocation of Fuel Subsidy Funds, at Merdeka Palace, Jakarta, September 3, 2022

Bismillahirrahmanirrahim.

Assalamu’alaikum warahmatullahi wabarakatuh,

Good afternoon,

May peace be upon us all,

Om Swastiastu,

Namo Buddhaya,

Greetings of Virtue.

Distinguished Ladies and Gentlemen,

The Government has made every effort to protect the people from fluctuations in global fuel prices. I actually want the prices of domestic fuel to remain affordable by providing state budget subsidies. However, the budget for fuel subsidies and compensation in 2022 has tripled, from Rp152.5 trillion to Rp502.4 trillion, and will continue to increase. Evidently, owners of private cars enjoy more than 70 percent of the subsidy.

Supposedly, the state budget should be prioritised in order to provide subsidies to the underprivileged. And now the Government has to make a decision in a tough situation. The Government’s final option is to reallocate fuel subsidy funds. Thus, the prices of several types of subsidised fuel will be adjusted.

A part of the fuel subsidy funds will be reallocated to provide more targeted assistance. Fuel Cash Assistance (BLT BBM) worth Rp12.4 trillion in total is distributed to 20.65 million underprivileged families, amounting to Rp150,000 per month, and starting to be given in September for a four-month period. The Government has also prepared a total of Rp9.6 trillion budget for 16 million workers with a maximum monthly salary of Rp3.5 million in the form of Wage Subsidy Assistance worth Rp600,000.

I have also directed the local governments to use two percent of the Rp2.17 trillion General Transfer Fund for public transportation assistance, online motorcycle taxi assistance, and fishermen.

The Government is determined that the use of public funds for subsidies must be precise. Subsidies should be directed more toward the underprivileged.

Furthermore, I requested a more detailed explanation from Minister of Energy and Mineral Resources, Minister of Finance, and Minister of Social Affairs.

Thank you.

Wassalamualaikum warahmatullahi wabarakatuh.

Pak Minister, the floor is yours.

(YC/MUR)