House to vote on energy subsidy policy

JAKARTA. The extended meeting between members of the House of Representatives Budget Committee and the government on Sunday night failed to reach an agreement on the value of energy subsidies for the revised 2012 state budget.

Although an ultimate compromise was not attained, lawmakers said significant progress was made as all factions agreed to leave two options on the table and bring them for voting to the House plenary session on Tuesday.

The first option is to limit government spending on energy subsidies to Rp 225.6 trillion (US$24.6 billion), consisting of Rp 137.4 trillion for fuel subsidies, Rp 64.9 trillion for electricity subsidies and an emergency fund worth Rp 23.3 trillion to deal with fiscal risks should global oil prices continue to rise.

This first option would also allow the government to raise fuel prices should the benchmark oil price (ICP) go beyond US$105 a barrel. In a bid to avoid a ballooning state budget and larger budget deficits, the government is proposing to raise subsidized fuel prices for both gasoline and diesel by Rp 1,500 to Rp 6,000 per liter starting April 1.

The second option that will be available for Tuesday’s voting limits government spending on energy subsidies to Rp 243 trillion, comprising Rp 178 trillion for fuel subsidies and Rp 65 trillion for electricity subsidies. An emergency fund worth Rp 23.9 trillion is available to support this agenda. However, the government will not be allowed to raise fuel prices.

“The final decision will be made at the plenary session. The budget committee failed to reach a consensus,” said Laurens Bahangdama of the National Mandate Party (PAN).

According to Laurens, the first option is supported by his party, the Democratic Party, the Golkar Party, the Prosperous Justice Party (PKS) and National Awakening Party (PKB). The rest — the Indonesian Democratic Party of Struggle (PDI-P), the Great Indonesia Movement Party (Gerindra) and the Peoples Conscience Party (Hanura) — would vote for the second option, Laurens said.

The PDI-P currently has 94 lawmakers in the House, or 17 percent of the 560 seats. Gerindra and Hanura, respectively hold 26 (5 percent) and 17 (3 percent) seats.

President Yudhoyono’s Democratic Party has 148 seats, or 26 percent. The PKS has 57 seats (10 percent), PAN has 46 (8 percent) and PPP has 37 (7 percent).

Jakarta Police spokesman Sr. Comr. Rikwanto said on Sunday that several labor unions, students’ groups and civil society organizations had reported to the police that they would hold rallies protesting the fuel price hike plan on Tuesday.

“Based on our calculations, the number of protesters will be around 4,000,” he said, adding that the number of protesters could still swell, as more groups were expected to report their rally plans on Monday.

The rallies are expected to be concentrated on three sites: the House of Representatives, the Hotel Indonesia traffic circle and the National Monument Park [Monas].”

The city has prepared 22,485 officers, including police officers, soldiers and public order officers, to anticipate any rallies protesting the fuel price hike plan in the upcoming days. (Rabby Pramudatama/ The Jakarta Post)