House and Govt agree on 2005 fuel subsidy of Rp 19 trillion

The House of Representatives? budget committee and the government agreed to reduce fuel subsidies to Rp 19 trillion (US$ = Rp.9,000) from the planned Rp 21 trillion in the draft 2005 State Budget, the Kompas newspaper reported in its Wednesday edition.

The committee?s chairman Arief Modatsir Mandan said the reduction of subsidy amount would come from an assumption that the fuel consumption in 2005 will fall to 59 million kiloliters from the 61.43 million kiloliters this year.

It will be the second reduction in the 2005 fuel subsidies. Last June, the House and the government agreed to cut Rp 1.07 trillion, making Rp 21 trillion from the planned Rp 22.07 trillion on an assumption that the consumption would fall in 2005 to 61.5 kiloliters from 61.9 kiloliters.

?As far as the fuel prices are concerned, Pertamina is still calculating it. We will wait until Wednesday (today). What is clear that Pertamina cannot calculate the price for not hiking fuel prices. Because, the government and the House are committed to not to increase fuel prices in 2005, unless the House and the government decode later,? Arief said. (*)