Govt cancels plan to limit sales of subsidized fuel

The government has cancelled plans to limit the sale of subsidized fuel to motorcycles and public transportation next year amid growing criticism, The Jakarta Post reported Friday.

Energy and Mineral Resources Minister Purnomo Yusgiantoro said on Thursday the plan was dropped due to the downward trend in the world?s oil prices, rather because of the growing pressure from the public.

With the Indonesian Crude Price currently below the US$100 per barrel mark, Purnomo said the impact of the surge in oil prices on the state budget would be still within the tolerable limit.

?The first reason why we proposed the plan to limit subsidized fuels was because of fears that the oil price would reach $100 next year and would pose a threat to our state budget next year,? Purnomo said.

?But based on our monitoring of oil prices, this plan will not be conducted in the near future,? he said.

The government initially planned to implement the limit in the first quarter of 2008 in order to prevent the 2008 budget deficit from spiraling out of control.

Under the plan, the sale of subsidized 88-octane Premium gasoline would have been restricted, to public transportation vehicles and motorcycles, with private motorists being required to purchase new, more expensive, 90-octane gasoline. (*)