MPR Chairman Bambang Soesatyo: No Country Gives As Big As Subsidy As Indonesia

Chairman of the People's Consultative Assembly (MPR) Bambang Soesatyo. (Screenshot)

JAKARTA - The chairman of the People's Consultative Assembly (MPR), Bambang Soesatyo, revealed that no country provides energy subsidies as large as Indonesia.

Just so you know, subsidies for Pertalite, Solar, and Indonesian LPG have reached IDR 502 trillion.

"No country has provided such a large subsidy", said Bamsoet at the 2022 MPR Annual Session, in Jakarta, Tuesday, August 16.

He said the spike in world oil prices in early April 2022 was estimated to reach US$98 per barrel. This figure far exceeds the 2022 state budget assumption of US$63 per barrel.

Bamsoet added that an increase in oil prices that is too high will make it difficult for Indonesia to seek additional subsidies to reduce inflationary pressures. No country provides such a large subsidy.

Meanwhile, he said, on the other hand, Indonesia's fiscal and monetary conditions also need to be a concern to face the potential global crisis.

"In the fiscal sector, the challenges that must be faced are normalizing the budget deficit, maintaining the proportion of foreign debt to Gross Domestic Product, and sustaining infrastructure financing", he added.

From a monetary perspective, he continued, the biggest challenges are controlling inflation, maintaining foreign exchange reserves, and the stability of the Rupiah exchange rate.

To note, the state has budgeted a subsidy/compensation of IDR 502 trillion for this year.

However, the use of subsidized fuel until mid-August has almost reached the quota for the entire 2022 period.

Meanwhile, Pertamina said that the subsidized diesel stock for 2022 was 14.9 million kilo liters.

The amount that has been distributed up to July has reached 9.9 million kilo liters.

A similar condition also occurs in Pertalite type fuel which has absorbed 16.8 million kilo liters of the quota of 23 million kilo liters.

The government has several times signaled that it will increase fuel prices.

Previously, the Investment Minister/Head of the Investment Coordinating Board (BKPM), Bahlil Lahadalia, asked the public to be prepared if the government later decided to increase the price of subsidized fuel oil (BBM).

"It feels like to hold on to the current fuel price, I have a feeling we should be prepared if, say, the fuel price hike happens", he said at a press conference in Jakarta, Friday, August 12.

Not much different from the Secretary of the Coordinating Ministry for the Economy, Susiwijono Moegiarso, who stated that the government was working on the most ideal price for the community if the increasing policy was actually implemented.

Even so, Susi is reluctant to specify what type of fuel will experience changes in the selling value.