Fuel price may increase by 40 percent next year

Vice President Jusuf Kalla said that the government' plan to reduce fuel subsidy to Rp 25 trillion next year from Rp 70 trillion at present will result in an increase in fuel price by up to 40 percent, Bisnis Indonesia reported on Wednesday.

"The government plans to reduce the subsidy to Rp 25 trillion. This year, the fuel subsidy reaches Rp 70 trillion due to the impact of the sharp increase in the world's crude oil price," the Vice President said in a seminar on gas on Tuesday.

"But, kerosene sold to households would still receive a subsidy," he added.

The Vice President, however, said that the government had yet to decide whether the 40 percent increase in the fuel price would be made all at once or gradually. "The technicality of the planned increase is being discussed," he added.

Minister of Energy and Mineral Resources Purnomo acknowledged that the increase in the fuel price could not be avoided due to the sharp increase in the price of crude oil which already reached US$50 per barrel.

But the minister said that the he did not know yet the percentage of the planned increase in the fuel price. "Honestly, I have not been informed about the planned 40 percent increase. I will ask Pak Jusuf which level of the crude price it uses to determine the increase," he added. (*)