Jakarta, IO – Finance Minister Sri Mulyani estimates that the quota for subsidized diesel fuel and Pertalite (RON90) will be exhausted in October.
“If we see consumption trend over the last eight months, the quota will run out in October if level of consumption remains the same. About 2.4 million KL of Pertalite is consumer per month,” said Sri Mulyani as reported by Kompas, Saturday (27/8).
At the same time, the energy subsidy and compensation budget, which amounted to Rp502 trillion this year will also be exhausted in October so additional energy subsidy and compensation budget will be needed until the end of the year.
“What is happening now, with the economic recovery and rising consumption, subsidy for diesel fuel and Pertalite will far exceed what is allocated in the state budget,” said Sri Mulyani.
She pointed out that based on the realization data, consumption for the first seven months of this year has far exceeded half of the target set in the state budget.
She further explained that the realization of diesel fuel consumption from January to July this year had reached 9.88 million KL or 65 percent of the quota. By the end of the year, this will reach 7.44 million KL or 15 percent in excess of this year’s 15.10 million KL quota.
Meanwhile, Pertalite consumption in the same period has reached 16.84 million KL or 73 percent of the quota. By year’s end, this will hit 29.07 million KL or 26 percent more than the 23.05 million KL quota.
She also pointed out the paradox that the subsidized Pertalite and diesel fuel, which is meant for the poor and low-income segment of the society, are mostly enjoyed by the rich. This year’s fuel subsidy and energy compensation budget is Rp502.4 trillion, comprising Rp93 trillion allocation for Pertalite and Rp143 trillion for diesel fuel.
Thus, she concluded, the fuel subsidy is not reaching its intended target. Moreover, the energy subsidy and compensation budget can increase by Rp198 trillion if there is no policy to control it.
“Thus, we need to reconsider whether adding hundreds of trillions of more fuel subsidy for those who can afford it is the right thing to do,” added Sri Mulyani. (rr)