Thu, April 26, 2012
World > Asia-Pacific

Indonesian president: Subsidized-fuel consumption must be cut under no price hike

2012-04-26 08:21:30 GMT2012-04-26 16:21:30(Beijing Time)  Xinhua English

JAKARTA, April 26 (Xinhua) -- Indonesian President Susilo Bambang Yudhoyono said on Thursday that the increased consumption of subsidized-fuel must be reduced significantly if there is no oil price hike.

President Yudhohono made the statement following the rising consumption of the subsidized-fuel by the high-income group recently, which could decrease the amount of the subsidized fuel that can be consumed by low income group, so that the government had to increase its amount.

While the government's plan to increase oil price hike by one third to 6,000 rupiah per litter (some 0.65 U.S. dollar) on April 1 was rejected by the parliament, it was given a right to increase the price under a certain condition. "On condition there is no oil price hike, the consumption of subsidized-fuel must be decreased significantly," President Yudhoyono said here at Bidakara building.

The government aimed to restrict the consumption of subsidized fuel by cars and was preparing a policy on that, Coordinating Minister for Economy Hatta Rajasa said on Tuesday.

The parliament has allowed the government to increase subsidized-oil prices when the global oil price is equal or greater than 15 percent in six months average from the country oil price assumed at the state budget of 105 U.S. dollar a barrel.

The government allocates 40.4 million kiloliter subsidized-fuel this year after the country consumed 41.7 million kiloliter last year.

Many middle and high income people have increasingly consumed subsidized fuel since the government increased non-subsidized fuel of Pertamax plus from 9, 850 rupiah per liter to 10,300 rupiah per litter earlier this month. The subsidized fuel price is at 4,500 rupiah a litter, a half of the Pertamax plus.

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