Govt proposes Rp 49.7t fuel subsidy for 2008
Tuesday, June 19 2007 - 10:41 AM WIB
The government is proposing to the House of Representatives a fuel subsidy of between Rp 40.9 trillion and Rp 49.695 trillion for next year on oil price assumption of between US$57 and $60 per barrel.
Director General of Oil and Gas at the Ministry of Energy and Mineral Resources Luluk Sumiarso said on Tuesday that the government proposed two alternative figures of total fuel subsidy for next year, that is Rp 40.9 trillion on the assumption that Indonesian crude price would average $57 per barrel and Rp 49.695 trillion on the Indonesian crude price assumption of $60 per barrel.
The U.S. dollar is assumed to be between Rp 9,300 and Rp 9,400 next year.
The subsidy will be used to subsidize the sale of Premium gasoline, diesel oil, kerosene and LPG on the domestic market. The consumption of Premium gasoline is projected to reach 16.95 million kiloliters next year, while the consumption of kerosene and diesel oil is assumed to reach 8.618 million kiloliters and 11 million kiloliters respectively. The consumption of liquefied petroleum gas (LPG) is projected to reach 1.281 million tons.
The government is promoting the use of LPG instead of kerosene by households in a bid to cut down its fuel subsidy
State owned oil and gas company PT Pertamina, which is the only company at present authorized to sell subsidized fuel on the local market, will get a margin of 13.5 percent from the sale next year, compared to 14.1 percent this year, according to Luluk.
“We deliberately pushed down the margin in order to reduce the government’s subsidy,” Luluk said during a hearing with the House of Representatives’ Commission VIII which among others handle energy affairs. (Godang)