Jakarta – Soaring world oil prices may risk the government spending IDR 320 trillion for energy subsidies and compensation for fuel and LPG, officials said Monday (18/4).
The trend of world oil prices continues to move upwards to levels above USD 100 per barrel. In the trading Monday morning, the price of Brent crude oil futures was monitored at the level of USD 113.02 per barrel. Rising world oil prices also raised the price of Indonesian crude oil (ICP/Indonesia Crude Price) which as of March 2022 reached USD 98.4 per barrel.
Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said, based on the assumption in the current state budget, ICP price is USD 63 per barrel, including allocation for subsidies and compensation for fuel and LPG of around IDR 130 trillion. To anticipate the increasing price of crude oil, the government must prepare additional funds of IDR 190 trillion for energy subsidies.
Therefore, the government must spend up to IDR 320 trillion to pay subsidies and compensation to Pertamina and PLN. Tasrif also appealed to the public to use fuel according to their needs, such that allocation of subsidised fuel and LPG can be closer to what was targeted.
He emphasised that the misuse of subsidised fuel would increase the financial burden on the state. “The public is asked to participate in monitoring and reporting if they find irregularities in the distribution and use of subsidised fuel,” he said.
He told the media that “currently, the impact of soaring world oil prices has increased the selling price of subsidised fuel and LPG far from the economic price … that does not include electricity.”
Under the Job Creation Law Number 55/2020 and Government Regulation Number 36/2004 which are derivatives of the Oil and Gas Law of 2001 concerning downstream oil and gas business activities, abusing subsidised fuel and LPG, can be given a maximum sanction of of six years imprisonment and a maximum fine of IDR 60 billion. (Hartatik)
Banner photo source: https://migas.esdm.go.id/post/read/filosofi-kerja-cecep-menteri-arifin