Jakarta, Aug 1, (Antara) - The government has regulated the use of
subsidized fuels in order to alleviate subsidy burden in the state
budget, which in the 2014-2015 period had reached Rp300 trillion.
It has downsized the volume of subsidized fuels from 48 million
kiloliters that had been set in the previous budget of 2014 to 46
million kiloliters in the revised 2014 state budget.
Beginning this month, the government has restricted locations of
refilling stations and time of transactions on subsidized diesel oil and
premium gasoline with consumers.
With effect from August 1, 2014, the government has banned the sale of
subsidized diesel oil at fuel stations in Central Jakarta.
From August 4, diesel oil can only be purchased between 6.00 a.m. and
6.00 p.m. in certain regions. The time restriction applies to those
regions or provinces that are prone to crime.
With regard to subsidized premium gasoline, the government has banned
its sale at fuel stations located at toll road sections beginning August
6, 2014.
"From
August 6, 2014, premium gasoline services by fuel refilling stations in
toll road sections will be abolished," Ibrahim Hasyim of the Downstream
Oil and Gas Regulator (BPH Migas) was quoted by detikFinance online
media as saying on Thursday.
Ibrahim
said that vehicle drivers need not worry however, because they could
still buy other kinds of non-subsidized fuels such as Pertamax and
Pertamax Plus.
"Refilling
stations at toll road sections should be selling adequate non-subsidized fuels," he said.
According to Tempo.co online, which also quoted Ibrahim as its source,
BPH Migas had issued a circular on July 24, 2014, on subsidized fuel
consumption control. The circular regulates that the sales of subsidized
diesel oil at refilling stations in Central Jakarta are not allowed
from August 1, 2014, among others.
"It has been effective in Jakarta, and we guarantee that it will work
effectively in this case too," Ibrahim Hasyim told Tempo.co on Thursday.
The policy was formulated following the endorsement of a cut in the
subsidized fuel quota in the revised 2014 State Budget. The quota was
decreased from the previous budget of 48 million kiloliters to 46
million kiloliters.
He said that Central Jakarta had been chosen to be a region for
subsidized diesel-free area because the volume of diesel oil consumption
in Central Jakarta was smaller than that in other areas in the capital
city such as North Jakarta and West Jakarta, which were nearer to
industrial activities.
In certain regions or provinces that were considered prone to abuse and
crime, the time of diesel oil sales has been restricted at between 6.0
a.m. and 6.00 p.m.
In Makassar, South Sulawesi Province, for example, Regional Marketing
Operation VII (MOR VII) of state-owned oil and gas firm Pertamina will
begin restricting the time of transactions of its subsidized diesel oil
at between 8.00 a.m. and 6.00 p.m. local time from August 4, 2014.
"The
restriction will be carried out based on the policy of BPH Migas," said
Ibnu Adiwena, customer relations officer of Pertamina MOR VII, in
Makassar on Friday.
He said that the policy had been formulated as an anticipatory step to
prevent excessive consumption that would exceed 48 million kiloliters in
2014.
In cooperation with other state-owned companies, Pertamina has also
restricted the use of subsidized fuels by government-owned vehicles,
diverting them to consume non-subsidized fuels.
Referring to the government's new measures, oil observer Kurtubi said
that time restriction on diesel oil transactions could create new
problems such as price hikes of products.
He said that cargo vehicles such as trucks and buses mostly operate
during night, and thus they will be forced to consume non-subsidized
fuels.
"If
the volume of subsidized fuels is restricted, it will weaken or reduce
the people's economic activities. The vehicles' coverage distance will
be reduced because of the lack of subsidized diesel.
So, it
will contradict the intention of encouraging economic growth," Kurtubi
was quoted by the online portalkbr.com on Thursday.
Therefore,
economist Tony Prasetyantono of the Gajah Mada University (UGM)
suggested that the next government should gradually raise subsidized
fuel oil prices if the government wanted to reduce the subsidy burden of
the state budget.
"Every
effort must be made to improve the structure of the state budget,
including reducing fuel subsidies," Tony Prasetyantono told Antara in
Yoyakarta on Thursday.
However, reduction of subsidies should be carried out in stages. "It is
difficult to entirely abolish subsidies," remarked Tony.
The UGM economist suggested price rise at a rate between Rp1,000 and
Rp1,500 per liter and should be carried out gradually. The next increase
can be implemented in the subsequent year.
The government last year raised the price of premium gasoline from
Rp4,500 to Rp6,500 per liter and the price of diesel oil from Rp4,500 to
Rp5,500 per liter to cut down on subsidies from Rp297 trillion to about
Rp200 trillion.
"Raising prices in stages will ultimately create a price of its economic viability," he stated.
In the meantime, economist Dr Nugroh of the Economic Faculty of the
University of Diponegoro in Semarang, Central Java, said on Thursday
that President-elect Joko Widodo (Jokowi) and Vice President-elect Jusuf
Kalla (JK), if inaugurated in October, should announce their fuel price
policy immediately.
"The opportune moment to announce the fuel price policy is right after
Jokowi and JK are inaugurated," Economist Dr Nugroho of the Economic
Faculty of the University of Diponegoro in Semarang, Central Java, said
on Thursday.
He said that the announcement of fuel price policy is important because
it was believed that the budget for fuel subsidies in the coming five
years will continue to increase.
The subsidy reduction policy has become a hot topic for the newly
elected president because it is almost impossible to avoid increasing
fuel prices amid the swallowing of subsidies, which has reached about
Rp300 trillion in the 2014-2015 period.
He said the president-elect had no other option than to reduce subsidies by raising fuel oil prices.
The question is how much price should be raised, so that subsidies could be reduced without burdening people.
"I believe an increase of Rp500 per liter of premium gasoline will be realistic," he added.
Nugroho said after the inauguration, the two leaders should explain
that the revenue from fuel price rise will be used for developing
educational program, health, and infrastructure.***2***
(T.A014/INE)
EDITED BY INE
(H-YH)
(T.A014/A/BESSR/A/Yosep) 01-08-2014 20:34:5 |
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