Vice Minister of Energy and Mineral Resources, Widjajono Partowidagdo, stated, Law on 2011 Revised State Budget allows the government to modify fuel prices as long as it meets certain requirements.
“Law on 2012 State Budget does not stipulate this for next year,” said Widjajono, today.
The condition is that the Indonesia Crude Price (ICP) has loaded up 10 percent to US$ 95 per barrel. In October, the prices climbed to US$ 109.25 per barrel, 15 percent higher than the set target.
Another requirement is that inflation is under State Budget's target of 5.7 percent.
“This year’s inflation is very low, deflation has even occurred,” he said.
National Statistics Agency said from January to October, the inflation rate has just reached 2.85 percent. In fact, the government is able to maintain inflation rate by paying more attention to rice supply, which will year-end inflation of 4.42 percent.
To date, Widjajono has asserted on the increase in Premium fuel prices by at least Rp 1,000 per liter for cars with small engineS. Meanwhile, the government would completely prohibit luxury cars from using the subsidized fuel.
By increasing fuel price of Rp 1,000 per liter, cars with small engines still receive a subsidy of Rp 3,500 per liter, because Pertamax fuel price may reach Rp 9,000 per liter.
Whereas, for public transportation and cargo vehicles, government suggested using money back guarantee as subsidy control and inflation protection.• VIVAnews
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