Jakarta – The energy subsidy budget ceiling next year will decrease, however, the budget ceiling value of Rp 336.7 trillion is believed to be still high, according to Finance Minister Sri Mulyani in a press conference, Tuesday (16/8).
This ceiling is prepared by taking into account the assumption that the Indonesian Crude Price (ICP) will decline to 90 US dollars per barrel. Meanwhile, the energy subsidy budget ceiling for financing fuel, LPG and electricity subsidies this year reaches Rp 502.4 trillion.
Furthermore, Mulyani reminded, the potential for the energy subsidy budget could exceed the budget ceiling set in the 2022 State Budget. “We see that with a large enough volume, this (energy subsidy budget) may be missed,” she said.
Energy subsidy spending has increased significantly this year, in line with soaring world crude oil prices. The assumption of the Indonesian Crude Price (ICP) in the 2022 State Budget has been changed to USD 100 per barrel, from initially only USD 63 per barrel. The high subsidy for energy commodities is also one of the main reasons for this year’s budget projection to swell to IDR 3,169.1 trillion.
In fact, without a surge in energy subsidies, the actual target for state spending would only reach IDR 2,714.1 trillion. “We also estimate that the exchange rate is relatively better than the current situation, which is very volatile. So actually, from an absolute perspective, subsidies are still very thick,” Mulyani said.
She further emphasised the importance of controlling the purchase of subsidised fuel. This is to ensure that energy subsidy spending does not exceed the budget ceiling that has been prepared. “If not (controlled) it will exceed. Even the Rp 502.4 trillion can be surpassed if the volume of subsidies is controlled,” said Mulyani. (Hartatik)
Banner photo: Finance Minister of Indonesia Mrs. Sri Mulyani Indrawati in Speech in Jakarta October 2018 (Ronny Kwok/shutterstock.com)