Remaining 6.2 Million KL Of Subsidized Fuel Quota, UGM Economist Suggests Two Policies So That The State Budget Doesn't Swell And Overcomes Scarcity

JAKARTA - Finance Minister Sri Mulyani again complained about the breakdown of the subsidized fuel quota. The reason is, Pertalite fuel consumption until July 2022 has reached 16.8 million kilo liters (KL) equivalent to 73.04 percent of the total quota set at 23 million KL, leaving only 6.2 million KL.

According to him, if the efforts to limit Pertalite consumption are not successful, the subsidized fuel quota will certainly be broken by the end of October 2022 at the latest.

In response to this, the Energy Economist from Gadjah Mada University (UGM) Fahmy Radhi said that the government is currently faced with a difficult dilemma. "If you increase the quota for subsidized fuel, the burden on the state budget for subsidies can increase to more than Rp. 600 trillion. If you don't increase the quota for subsidized fuel, there will be shortages at various gas stations, which has the potential to trigger social unrest," he said in a written statement, Friday, August 12.

Fahmy added that only strict and straightforward restrictions could prevent the breakdown of the subsidized fuel quota.

Meanwhile, MyPertamina will not succeed in limiting subsidized BBM so that it is right on target. In fact, it causes inaccurate targets and injustice for consumers who do not have access.

"There are two policies that can prevent the breakdown of subsidized fuel. First, immediately stipulate in the Presidential Regulation that only motorcycles and vehicles for transporting people and goods are allowed to use Pertalite and diesel," continued Fahmy.

Second, Fahmy proposes to reduce the wide price disparity between Pertamax and Pertalite prices. "The trick is to increase the price of Pertalite and reduce the price of Pertamax at the same time a maximum price difference of Rp. 1,500 per liter. This price policy is expected to encourage Pertalite consumers to migrate to Pertamax voluntarily," he added.

In addition, he said, it is also necessary to carry out public communication on a large scale that the use of Pertamax is actually better for vehicle engines and more efficient.

"To prevent the breakdown of the subsidized fuel quota, we can't just complain and appeal. But we need firm and straightforward policies that are immediately implemented, not just backwards," concluded Fahmy.