Fuel subsidy to be reduced by 40 percent next year

The House of Representatives' task force for state budget deliberation has agreed to reduce the fuel subsidy by about 40 percent to Rp 54.3 trillion in the 2006 state budget from about 89.2 trillion at present, Bisnis Indonesia reported on Friday.

A Ramson Siagian, a member of the task force, said that with the allocation of Rp 54.3 trillion in the fuel subsidy in the 2006 state budget, the government hoped there would be no more increase in the domestic fuel price next year.

Under the fuel subsidy arrangement, the subsidized fuel quota to be allocated next year would reach 41.578 million kiloliters, comprising of 17.08 kiloliters of Premium gasoline, 10 million kiloliters of kerosene and 14.498 kiloliters of diesel oil.

The non-tax revenue from the oil and gas sector in the 2006 state budget is expected to reach Rp 146.2 trillion, while the valued added tax would reach Rp 128.3 trillion.

The budgetary task force's decision would be further deliberated at the House's Budgetary Commission which would then submit the proposed budget at the House's plenary session for final approval. (*)