Govt, House committee agree on 2004 fuel subsidy

The government and the parliament’s (DPR) state budget committee Tuesday agreed on fuel subsidy of Rp14.5 trillion (US$=Rp8,570) for 2004, a senior official said.

The Rp14.5 trillion compares with the Rp13.2 trillion subsidy set for this year, oil and gas director general Iin Arifin Takhyan told reporters after attending a meeting with the House's state budget working committee.

The two parties also set next year's fuel consumption at 60 million kiloliters, up from the 58.6 million kiloliters decided for 2003, Iin said.

Their agreement however will have to be approved by DPR in its plenary meeting according to existing laws.

Iin said the estimation that the Indonesian economy will grow by 4.8 percent in the next year was the reason behind the decision to raise fuel subsidy and fuel consumption target for 2004.

Another factor is the increase in the country's population, the official said.

The government had actually planned to further reduce the subsidy on various fuel products early this year in order to reduce state budget deficits. But, widespread public protests forced it to delay the cut in the subsidy. (godang)