JAKARTA (TheInsiderStories) -Minister Energy and Resources Minerals Ignatius Jonan ensure government will not raise the price of fuel subsidized until end of March, amid the rising of global crude price oil which is currently in range above US$50 dollars per barrel. Head of President’s Staff Teten Masduki also said the government not cut electricity’s subsidized but want to implement targeted subsidies.
The minister said in a press statement, the Government realized the conditions of Indonesian society is experiencing a decline in purchasing power. He added, the government will review the fuel subsidized price by end of March 2017.
Referring President Regulation No. 191 of 2014 on Supply, Distribution and Pricing Retail fuel, and Article 4 of Regulation of the Minister of Energy and Mineral Resources No. 4 of 2015 on Changes to the Regulation of Minister Number 39 Year 2014 regarding Calculation Retail fuel prices, the government set a limit on the highest and lowest prices. The lowest price is determined based on the base price plus VAT and the Motor Vehicle Fuel Tax (PBBKB) with margins at least
low 5% of the basic price.
While, the highest price is determined based on the base price plus VAT and PBBKB with margins at least 10 percent higher than the base price. The price of oil fuel Pertamax, Pertamax Plus, Pertalite and Pertamina Dex, set appropriate market mechanisms that can fluctuate up and get down.
Muchamad Iskandar Marketing Director of state-owned energy company PT Pertamina explained the company lift up the special fuels price Rp300 a liter (in average) over the rising of market price index has gone up 6 percent in average combined with the strengthening of the rupiah. The price only rose 4 percent in average compare to previous price.
President Director of PT Perusahaan Listrik Negara (PLN) Sofyan Basir adding, the company will not cut the fuel subsidy for 450 volt ampere (VA) customers. But together with the government start to implement targeted subsidies program.
Based on government data, He continued, the number of customers in the power of 450 MW to received the subsidy will increased to 27 million families in from last year 23 million families. Currently, Sofyan said, there are 46 million recipients use the 450 VA and 900 VA. Of the 23 million use 900 VA, He adding, only 2.05 million subscribers entitled to receive the subsidy.
With this program, Sofyan said, PLN will saved the electricity subsidy budget of Rp20 trillion. The funds, He explained, will use to lighting 12,000 villages across Indonesia.
So far, PLN has been implemented the electricity in 1,000 villages at 2016 and plans to lighting 2,000 villages, which is 1,300 in Sumatra and Papua targeted at 1,400 in 2017.