Govt yet to decide fixed energy subsidy in 2014

JAKARTA. The Finance Ministry has not yet determined the amount of the fixed energy subsidy to anticipate fuel price hikes in 2014.

“I’ve said there will be possible changes in the energy subsidy policy. Such a policy should not be removed. All possibilities are still on the table because the government is still preparing the subsidy,” said Finance Minister Chatib Basri after speaking at the Indonesia Summit 2014 in Jakarta on Wednesday, as quoted by Antara news agency.

He said the government had discussed the fixed energy subsidy since last year.

“On the fixed energy subsidy, let’s just wait and see how much we will subsidize the fuel per liter. Do we need to increase the fuel prices or take any other measures? Let’s see,” said Chatib.

He denied that the ideal amount between subsidized and non-subsidized fuel prices was Rp 1,000 (0.083 US cents) per liter.

“We should see the reality in society,” said Chatib.

The Finance Ministry recorded that the absorption of energy spending at the end of 2013 had reached Rp 310 trillion, 103.4 percent of the 348.1 trillion budgeted, due to high spending on fuel subsidies that reached Rp 210 trillion or 105.1 percent from the Rp 199.9 trillion budgeted.

Earlier, Deputy Finance Minister Bambang Brodjonegoro said off target fuel subsidies had impeded efforts to reduce income gaps.

He said economic growth needed an efficient energy subsidy scheme to increase fiscal room and to be allocated to productive sectors such as infrastructure, education and health. (ebf)