Fuel subsidy to increase to Rp 90t

Fuel subsidy bill may climb to Rp 90 trillion (US$9.86 billion) this year, amid rising global oil prices, but the government has no plan to raise domestic fuel prices, the Minister of Energy and Mineral Resources said on Monday.

"With our oil price assumption averaging $72 a barrel, then the subsidy can reach Rp 90 trillion in 2007," Purnomo Yusgiantoro said.

In order to cut the subsidies, the government would take measures to reduce the fuel consumption of the public, he said.

Before the oil price hit above $90 per barrel over the past several weeks, the government had allocated around Rp 56 trillion in its 2007 revised budget for fuel subsidies assuming an average oil price of $60 a barrel. (*)