House Commission VII maintains 2005 fuel quota at 59.63m kilo liter

The House of Representatives Commission VII on energy maintained the country's fuel quota, or the amount of fuel to be sold at home, for this year at 59.63 million kilo liter.

The figure was reached during a meeting late on Tuesday with Minister of Energy and Mineral Resources Purnomo Yusgiantoro, which discussed the second revision of the 2005 state budget. The original budget also assumed the same quota figure.

The fuel quota will affect the amount of the government fuel subsidy in the 2005 state budget. As the country still import part of its fuel needs and as international oil prices soar, the government and lawmakers were forced to revise for the second time the 2005 state budget particularly due to the impact of oil price hike on fuel subsidy.

There is now growing pressure for the government to raise fuel prices as the state budget might not be able to cover the soaring fuel subsidy expenses in the wake of the oil price hike.

The Commission VII said that with the fuel quota figure and the rising oil prices, the size of fuel subsidy for this year will have to be raised to Rp 119.39 trillion, compared to Rp 76.5 trillion set under the current budget.

A separate state budget Commission VIII and the Ministry of Finance will decide the final figure for fuel subsidy (and the hike in fuel prices at home if deemed necessary) based on the inputs suggested by the Commission VII and the Ministry of Energy and Mineral Resources.

It is expected that the revision of the 2005 state budget would be completed before the end of this month.(dino)