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(ANTARA) Finance Minister Bambang Brodjonegoro: Fuel Subsidy Stands Around Rp 1,300
The government considered the US dollar exchange rate and international oil prices before increasing the prices of subsidized fuels by Rp1,000 a liter, Finance Minister Bambang Soemantri Brodjonegoro said.
"We looked at the latest trends in global oil prices and exchange rates. We combined the two elements to calculate the economic prices of our premium-grade gasoline and diesel oil," he stated here on Friday.
Although global oil prices followed a downward trend since the middle of this year, the rupiahs exchange rate against the US dollar hovered above Rp12,000. As a result, the government cancelled an earlier plan to raise the prices of subsidized fuel by Rp3,000 a liter, he revealed.
At Rp2,000 a liter, the prices of subsidized fuels had come closer to their economic prices. However, the government continued to subsidize fuel oils, although the amount of subsidy fell drastically, he remarked.
"According to our calculation, if we did not take the policy, the subsidy of premium-grade gasoline would be Rp3,300 a liter to reach its retail economic price. As the prices of subsidized fuels have been raised by Rp2,000 a liter, the fuel subsidy now stands at Rp1,300 a liter. So we still provide subsidy," he noted.
By diverting the fuel subsidy from consumptive sectors to productive sectors, the government would be able to save Rp9.5 trillion by the end of this year, he added.
"We will be able to save Rp9.5 trillion until the end of this year. As a general state treasurer, I consider it good," he pointed out.
He revealed that the government was considering a fixed subsidy policy instead of a price subsidy system for the future so that state budget will become more secure and invulnerable to oil price and exchange rate volatility.