REPUBLIKA.CO.ID, JAKARTA – Two options of fuel price increase are on the table, the Minister of Energy and Mineral Resources (ESDM), Jero Wacik, on Tuesday. These options now are presented to the House of Representatives (DPR). 

The first option is to increase gas and solar price to 1,500 IDR per liter. On the second scenario, the government must subsidize the fuel and solar since their price will fluctuate and depends on the world price.

“The value of subsidies limit is 2.000 IDR per liter,” he said in the first hearing with the House Commission VII.

The government, Wacik said, tended to prefer the second option, since the maximum subsidy will be 2,000 IDR per liter, regardless the oil price in the world market. 

“The commission VII will discuss those options,” he expected.

Should the first option was chosen, Wacik added, the public would have to adjust to the fluctuating price. However, government still strives to find the right formula on calculating the fuel price. Wacik guarantees that the government will minimize the impact.

Government prepares four types of compensation programs. They are direct cash assistance for the poor, add some budget allocation for the rice for the poor program, education subsidies for low-income families, and special subsidies for public transportation. The latest program will require coupon distribution for students.

The compensation schemes are now discussed in 2012 state budget (APBN) plan. Government should also prepare the four options if they should decrease the subsidy for fuel due to exceeded quota. The subsidized fuel volume for this year is 40 million kilolitre (kl) with 2,5 kl allocated as strategic oil reserve. The government, Wacik said, initiated the diversification from fuel to gas by providing converter kit, special machine shop, and certification. 

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