Govt can save Rp 9 trillion from fuel subsidy: Purnomo

The government can reduce up to Rp 9 trillion from the planned Rp 19 trillion fuel subsidy in 2005 by either reducing or eliminating the subsidy for industrial diesel oil (also known as diesel), bunker oil (used in ships) and premium gasoline, the Investor Daily Indonesia and the Harian Ekonomi Neraca newspapers reported in their Thursday edition.

The reduced subsidy can in turn be allocated to provide education and health subsidy for the poor income people.

?It can be done by maintaining the present subsidy for fuel and kerosene. But everything will be depend upon the new government and the House of Representatives,? Minister of Energy and Mineral Resources Purnomo Yusgiantoro said after opening the ?First International Workshop on Solar Energy Utilization" in Jakarta on Wednesday.

Purnomo mentioned that the fuel subsidy still must be maintained but the way it was provided must be changed slightly: direct subsidy to the poor income people.

?Do not give a chance to the people to think that the fuel subsidy is going to be eliminated. Whatever the portion of the subsidy, it must be given directly to the (poor income) people,? Purnomo explained.

He further mentioned that out of seven types of fuel, aviation turbine and aviation gasoline do not have any subsidy. Their prices are fixed according to the market price. In future, the subsidy for the three commodities, industrial diesel oil, bunker oil and premium gasoline, must be eliminated in phased manner.

?In order to not to make the lives of common people more difficult, the House and the government must have an in-depth discussion on fuel and kerosene,? the minister said.

The government will not increase the fuel rates until October 20, 2004 or until the end of Megawati Soekarnoputri?s administration.(*)