Chairman Of PAN Proposes Fuel Subsidy To Be Given Directly To The People

JAKARTA - Chairman of the National Mandate Party (PAN) Zulkifli Hasan proposed that fuel subsidies (BBM) be given directly to the public as a solution to the increase in energy subsidies in 2022 which reached Rp500 trillion.

Zulkifli said, with turbulent international conditions, such as the unpredictable Russia-Ukraine war and various other causes, the price of oil and LPG in the world market increased.

"This will result in an increase in energy subsidies in 2022 to more than Rp 500 trillion or almost 30 percent of our state budget revenue," Zulkifli said in a statement quoted by ANTARA, Monday, August 15.

Zulkifli said that subsidies should be given to the people in a more just, sustainable and prosperous manner.

According to him, PAN offers two solutions, namely first, switching energy subsidies from commodity-based to direct subsidies.

"Second, accelerate the transformation of clean energy. Subsidies are given directly to our poor citizens," he said.

Zulkifli quoted data from the Central Statistics Agency (BPS) regarding 26 million people who are estimated to have a consumption need for two motorbikes and consume 2x3 kilograms of LPG per month, while electricity requires up to 900 watts.

According to the Minister of Trade, with the subsidies for fuel and LPG, the poor people can afford Rp. 500 thousand rupiah per person per month, but the government will only bear Rp. 15 trillion per month.

"This figure is around Rp. 180 trillion per year. At the same time, the government can still save the money it burns (current fuel subsidies) to accelerate Clean Energy Transformation," he said.

According to Zulkifli, other ways the government can take are, first, accelerating the use of electric vehicles; second, increase the number of electric stoves for households.

He explained the third point, namely expanding and multiplying charging points for electric vehicle batteries; and fourth, increasing the supply of electricity from new and renewable energy.

"This Clean Energy Transformation will use a lot of materials originating from within the country, so that at the same time it will encourage economic growth and employment opportunities in the country. This means that welfare will increase," he said.

Zulkifli proposed the direct subsidy, because energy is a basic human need, including Indonesian people, so it cannot be avoided.

However, he realized, currently there is a gap between consumption and national ability to prepare energy availability.

"Our fuel needs are 1.6 million barrels per day, while production is only 0.6 million barrels. This means that we import 1 million barrels of crude oil and fuel per day," he said.

In addition, according to him, the need for LPG per year reaches around 8 million tons, and is only met by domestic production of less than 1 million tons, so around 7 million tons must be imported. In fact, according to him, all energy imports, especially oil and LPG, drain foreign exchange.

Zulkifli did not deny the post-COVID-19 conditions, namely the economy is still in a recovery status and people's purchasing power is still low, so subsidies must be borne by the state.

However, he considered, in the long term this problem must be overcome, so that subsidies must be right on target, namely given to people who can't afford it.