Indonesia currently reviewing potential fuel price hike -minister
FILE PHOTO: A worker at a state-owned Pertamina petrol station holds money as a motorcycle is filled with subsidised fuel in Jakarta October 31, 2014. REUTERS/Darren Whiteside
JAKARTA : Indonesia is reviewing a potential hike in the price of subisidised fuels, the energy minister said on Tuesday, as the government faces a ballooning energy subsidy bill.
The country has tripled its energy subsidy budget to 502 trillion rupiah ($34.06 billion) this year to keep prices of subsidised gasoline and diesel and some power tariffs unchanged amid rising global energy prices.
Last week, finance ministry officials said that amount may not be enough to meet rising fuel demand.
"We are still coordinating," Arifin Tasrif, the energy minister, told reporters on Tuesday, adding that he hopes a decision will be reached soon.
He said the government is revising rules on subsidised fuel sales and will need time to communicate the plan to the public.
Media reports on Monday cited Arifin as saying the revised rules will complement the price hike and are expected to be issued this month.
President Joko Widodo, in recent public appearances, has mentioned this year's energy subsidy allocation is too large, but has not referred to any plans to raise fuel prices.
State energy firm Pertamina, which sells subsidised fuels, declined to comment, saying fuel price policy was the government's domain.
Pertamina said as of July it had sold 9.9 million kilolitres of subsidised diesel, about two-thirds of the total quota for the year, while sales of subsidised gasoline had reached 16.8 million kilolitres, or 73 per cent of 2022's quota.
Meanwhile, in places like Banten and Riau provinces, media reported vehicles were seen waiting in long queues at some gas stations, some of which had put up signs saying they were out of subisidised fuels.
The central bank has said the large subsidy budget has helped Southeast Asia's biggest economy keep inflation relatively low this year and provided monetary policymakers room to delay interest rate hikes. Bank Indonesia is one of a few Asian central banks that has not lifted its benchmark rate from pandemic-era lows.
($1 = 14,740.0000 rupiah)
