Indonesia to announce new energy policy

Coordinating Minister for the Economy, Aburizal Bakrie, said the government would soon issue an energy policy to reduce the government's subsidy on oil fuel gradually, Antara reported Thursday.

Bakrie said that coal and gas, which the country has in abundance, will be used for domestic consumption, while oil will be dedicated for exports.

Bakrie said he had discussed the policy with President Susilo Bambang Yudhoyono before his inauguration.

If oil could be replaced with gas as fuel, the country would save 80% of subsidy.

The government would encourage the use of gas as fuel for households, factories, cars, etc.

Bakrie acknowledged that the program would need a large investment, inculding for the construction for gas pipelines.

He indicated, however, that replacing oil with coal or gas would come to reality in the long term.(*)