GOVT HARD PUT TO MAINTAIN SUBSIDIZED FUEL QUOTA

By Andi Abdussalam

Jakarta, June 7 (ANTARA) - The government is struggling to maintain its subsidized fuel oil quota at 38.6 million kiloliters this year amid signs of increasing consumption that may reach 40 million kiloliters, an amount that would force the government to increase its subsidy budget by Rp2.38 trillion on top of the 2011 budget ceiling of Rp95.9 trillion.          Finance Minister Agus Martowadojo said the subsidized fuel oil quota amounting to 38.6 million kiloliters must be maintained in order not to burden the 2011 state budget.          "Last year, the use of subsidized fuel oil exceeded the target to reach up to 42 million kiloliters, but now we ask that the 38.6 million kiloliters should be maintained," the minister said on Monday.          Based on its estimate however, subsidized fuel oil consumption this year will reach 40 million kiloliters, or even more than that.          According to Oil and Gas Director General Evita Legowo, the 40 million kiloliter estimate is above the subsidized fuel oil quota set in this year's State Budget of 38.6 million kiloliters, or there would be additional subsidized fuels amounting to 1.4 million kiloliters.          "Up to the end of the year it may amount to 40 million kiloliters," she said. This prediction is still below last year's realized consumption at 42 million kiloliters.          Additional consumption of subsidized fuel oil by 1.4 million kiloliters would raise the subsidy by Rp2,38 trillion.         Acting Head of the Finance Ministry's Fiscal Policy Affairs, Bambang Brodonegoro said each addition by one million kiloliters to the subsidized fuel oil quota will increase the subsidy in the state budget by Rp1,7 trillion.          "Each one million kiloliter increase has the potential to raise subsidy by Rp1.7 trillion. This is not a deficit but additional subsidy," Bambang Brodonegoro said.           He ascertained the subsidy would increase if subsidized fuel oil quota in the state budget was raised from the previously set at 38.6 million kiloliters.  "The subsidy will surely increase if the subsidized fuel oil quota is raised," he said.          Yet, there are signs that consumption may reach 40 million kiloliters. "Fuel subsidy in the year ended April 30, 2011 reached Rp29.2 trillion or 30.4 percent of the ceiling of (Rp95.9 trillion) in the 2011 state budget,"  Bambang Brodjonegoro said. This figure is far higher if compared with that in the same period a year earlier.          In the first four months of 2010 fuel subsidy only reached Rp10.9 trillion or 12.2 percent of the ceiling of Rp88.9 trillion in the 2010 state budget.          Director General Evita Legowo said that if the government did not make any special efforts, the subsidized fuel oil consumption may reach as high as 42 million kiloliters.          This condition raised Chief Economic Minister Hatta Rajasa's concern. He said subsidized fuel consumption which exceeded the quota in the 2011 state budget would raise a deficit and put the  budget under pressure.          "Don't let it exceed the quota. We don't want our fiscal to collapse," he said following a coordination meeting at the Coordinating Ministry for Economic Affairs last month.          Although it was not easy to maintain the subsidized fuel quota of 38.6 million kiloliters for 2011, the government would do its utmost to prevent consumption from exceeding the quota, he said.          "Consumption in the first quarter of 2011 reached 30 percent. If we don't control the consumption it will exceed the quota. So we must discipline ourselves to safeguard the quota," Hatta said.          Finance Minister Agus Martowadojo said that in order to maintain the target, regulations on   subsidized fuel oil consumption cuts must be implemented as soon as possible and should not be delayed again.          He said that the government should have implemented its policy on subsidized fuel oil consumption cuts in October last year when it was predicted that the use of subsidized fuel oils would increase sharply.          "We cannot yet implement the regulation last year, no can early this year because of the reason that we were still lack infrastructures.  After all, not all gasoline stations in Jakarta were equipped with pertamx oil tanks. So, the implementation of the regulation was pushed back until last April. Yet it has now been delayed again," the minister said.          He said that his ministry would focus on how to maintain the subsidy so that it would not exceed the already set quota.          In this case, the minister supported the plan to launch a trial-test for the government's policy on subsidized fuel oil consumption cuts as of July 1, 2011. "We welcome the plan to begin the limitation of subsidized fuel consumptions aimed at making effective and meet the targeted quota," the minister said.          The minister also expected that another effective solution would be found as the consumption volumes of fuel oil had up to now increased seven percent compared with that in the same period last year.***5*** (T.A014/A/HAJM/19:25/a014) 07-06-2011 19:22:4