Jokowi: Prices For Pertalite, Solar, LPG And Electricity Are Not Real But Subsidized Prices

JAKARTA - President Joko Widodo (Jokowi) ordered Finance Minister Sri Mulyani Indrawati to calculate the resilience of the 2022 state budget because subsidy spending has reached Rp502 trillion.

"This is a huge number. This is what we need to know to prevent inflation from being high. But will the State Budget continue to be strong? Yes, the Minister of Finance will calculate it later," said President Jokowi when opening the 2022 National Coordination Meeting for Inflation Control at the State Palace, Jakarta, Thursday, August 18, quoted from Antara.

The government throughout 2022 has withheld the state budget to be able to disburse subsidies to the public. The subsidy is spent so that the energy and food prices imposed on consumers do not increase drastically.

The government was forced to intervene because global geopolitical uncertainty this year has put pressure on the supply chain of energy commodities, especially on the supply side. This resulted in an increase in commodity prices for energy and food goods in the global market.

Therefore, by spending on subsidies and compensation, the government hopes that people's purchasing power will be maintained and the national inflation rate will continue to be controlled.

"The inflation rate at 4.94 percent was still supported by the non-increase in the price of our fuel, Pertalite, Pertamax, diesel, LPG, electricity. That's not the real price, it's not the economic price, it's the price subsidized by the government, the amount of which is IDR 502 trillion," said President Jokowi.

Until July 2022, national inflation on an annual basis is still around 4.94 percent (yoy).

The President said inflation in other countries was much higher than Indonesia, such as the United States at 8.5 percent, then the European Union at 8.9 percent. In fact, the President said, there are countries whose inflation reaches 79 percent.

"Because the scourge of all countries is inflation, the scourge of all countries is inflation," said President Jokowi.

The government is currently still calculating the possibility of changing the price of subsidized Pertalite fuel, because the quota set in the 2022 APBN continues to run low.

Previously reported, until July 2022, state-owned company PT Pertamina recorded Pertalite consumption had reached 16.8 million kiloliters, equivalent to 73.04 percent of the total quota set at 23 million kiloliters. This high consumption figure makes Pertalite's quota remaining only 6.2 million kiloliters.