Govt, House agree to cut 2008 fuel subsidy

The government and the House of Representatives' Commission VII  had agreed on Monday to cut 2008 fuel subsidy by Rp 1 trillion (US$=Rp 9,400) to Rp 45.8 trillion thanks to the program substituting LPG for highly subsidized kerosene.

 

Director General of Oil and Gas at the Energy and Mineral Resources Ministry Luluk Sumiarso said in Jakarta Tuesday that the fuel and LPG subsidy for the 2008 budget is set at Rp 46.70 trillion on the condition that that the conversion program runs well as planned.

 

“In this way the fuel subsidy can be reduced as a result of the expected drop in the level of kerosene consumption,” he said.

 

The volume of subsidized kerosene can be reduced to 7.89 million kiloliters (kl) or around 732,109 down compared to 8.62 million kl set by the government, he said.

 

Subsidized volume of gasoline and HSD will retain at 16,95 million kl and 11million kl, respectively. (Godang/Bernard)