REPUBLIKA.CO.ID, JAKARTA - Deputy Governor of Bank Indonesia (BI), Perry Warjiyo said any fuel subsidy policies would affect inflation temporarily but in the longer term the impact will be positive for economy.  

BI has been reviewing several options to helped the government in fuel management. "If the government decides to raise fuel prices to all types of transportation, it can cause severe inflation. But if the fuel rise applied to certain types then the impact to inflation may be lesser," Warjiyo said.

Warjiyo warned that the inflation would be rocketing if two-wheeled vehicles was forced to use increased price fuel since rhw  two-wheeled  consumed 50 percent of fuel subsidy. "

National budget (APBN) in 2013 is allocated to energy subsidies worth 274,7 trillion IDR. It consists of electicity subsidy 80,9 trilion IDR, and fuel subsidy 193,8 trilion IDR. Total volume of fuels subsidy amount to 46 million kilo liters (kl) and predicted to reach 53 million kl which potentially affects fiscal policies.

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