Govt will fully remove electricity and fuel subsidy in 2014

The government plans to continue gradually removing fuel and electricity subsidies so that by the end of 2014 or 2015, prices of both fuels and electricity will fully achieve their actual economic values, Kompas reported on Tuesday.

Energy and Mineral Resources Minister Darwin Zahedy Saleh said in Jakarta on Monday that the government was seeking the most effective approach in educating the people including the poor to understand why the subsidies of both fuels and electricity should be removed.

?If the prices are higher, the people will save the energy use. This is what we want the people to understand,? he said, adding that in the future the government would provide a direct subsidy to the poor instead of giving the subsidy in the form of low prices like what had been done so far.

At present, the subsidy on the sales of electricity and fuels are mostly enjoyed by rich people instead of the low income group. By changing the subsidy formula to a direct system, the government?s program to fight poverty and to improve the living standards of the poor could be more effectively achieved, he said.

He said that the government was still drafting phases of subsidy removal to ensure that by the end of 2014 or 2015, both fuels and electricity can be sold at their respective market price levels. (*)