Finance Minister supports for fuel limitation

JAKARTA: Finance Minister is optimistic for volume of subsidized fuel not to exceed quota in this year, if a policy for the fuel consumption limitation is applied per July 1, 2011.Finance Minister Agus D. W. Martowardojo welcomes for a trial plan for
Wandrik Panca Adiguna
Wandrik Panca Adiguna - Bisnis.com 31 Mei 2011  |  02:29 WIB

JAKARTA: Finance Minister is optimistic for volume of subsidized fuel not to exceed quota in this year, if a policy for the fuel consumption limitation is applied per July 1, 2011.Finance Minister Agus D. W. Martowardojo welcomes for a trial plan for the subsidized fuel limitation in Java Island per July 1 proposed by Energy and Mineral Resources Ministry, from the initial plan per April 1.If the subsidized fuel can be limited commencing on July 1, and is in effective in Java Island, as communicated by Energy and Mineral Resources Minister, its volume can be maintained at 38.6 million kilo litters, he said, yesterday.Energy and Mineral Resources Ministry cooperating with Executive Agency for Upstream Oil and Gas Business (BP Migas) and Pertamina had implemented a mapping for fuel and vehicles types as the object. Focusing on Java Island, the premium and diesel fuel consumption by personal vehicles and motorcycles are quite huge, so it needs to be limited.In the meantime, the deficit of state budget is predicted to continue higher by IDR16 trillion concerning on deviation of macro assumptions.The assumptions include higher Indonesias crude oil price (ICP) to US$100 per barrel than assumed by US$80 per barrel, whereas the production just stayed at 945,000 barrels per day or lower than targeted by 970,000 bph with average of rate exchange by IDR8,800 per US$ leading to exxecive volume for the quota by 38.6 million kilo litters.Having no alternativeExecutive Director of Econit Advisory Group Hendri Saparini viewed the postponement on subsidized-fuel price adjustment isnt aimed to find an appropriate alternative measure, but to avoid socio-political issues.Then, in accordance with Central Bureau of Statistics data, 65% of total premium users are the two-wheel vehicle owners having personal income under by US$4 per day.They arent categorized as rich people and even are categorized as poor people if the limitation policy or higher subsidized fuel price have been already applied.The subsidized-fuel problem each year is viewed not to be stimulated by higher consumption level, but by rampant of illegal subsidized-fuel export or leakage distribution. Therefore, government should focus on overcoming the both cases, not declining subsidized-fuel portion of low-class people.Government said repeatedly that we are solving the leakage and illegal export cases, as Hendri affirmed.In a conclusion, government must find the most efficient measure to apply the policy effectively as the errors of policy will stimulate the higher inflation pressure. (t01/wiw)

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