Commission VII Member Says Government Has No Reason To Increase Subsidized Fuel Prices

Illustration (Photo: Doc. Antara)

JAKARTA - The government's plan to increase subsidized fuel prices has received mixed reactions from various parties.

Member of Commission VII DPR RI Rofik Hananto assesses the government's plan to increase the price of subsidized fuel oil (BBM) is a new disaster for the people of Indonesia.

This increase plan is deemed inappropriate, because world oil prices are currently falling and are in the range of 90 US dollars per barrel.

According to Rofik, there is no reason to increase fuel prices at this time, because the subsidy and compensation funds have been allocated assuming an ICP price of 100 US dollars per barrel.

Meanwhile, world oil prices as of August 21, 2022, are already at 90 US dollars per barrel, with details of West Texas Intermediate (WTI) Crude at 89.63 US dollars per barrel, and Brent Crude at 95.50 US dollars per barrel.

"This means that the budget cushion that has been provided is appropriate to accommodate fluctuations in world oil prices. Why provide this cushioning fund if in the end the price of fuel goes up too. People certainly cannot digest this logic of thinking. Once again they feel victimized and their interests defeated. ," he said in an official statement, Tuesday, August 23.

The government, he said, has proven not to be credible and rational in its budget allocation plan.

According to him, many budget allocations are aimed at transportation infrastructure projects that are far from the welfare of the people, but the investment value is very large, such as airports, ports, and high-speed trains.

"The Jakarta-Bandung high-speed train project, for example, which is currently delayed, not to mention stalled, the budget is swelling and requires budget assistance from the state budget," he continued.

The construction cost, Rofik continued, is estimated to swell by 1.1 to 1.9 billion US dollars from the initial calculation or around Rp. 16.3 trillion, equivalent to Rp. 28.2 trillion, assuming an exchange rate of Rp. 14,800.

"This is different from the president's promise that he will not use any public money. It is not clear yet which segment of society will be the beneficiaries because the ticket costs are estimated at Rp. 400,000 one way, this high-speed train project will already burden the state budget," he added.

Furthermore, he added, based on data from PT Kereta Cepat Indonesia China, the progress as of July 2022 has reached 84 percent.

It is not clear whether this fast train project will go forward without budget assistance from the state budget.

Here it is clear that the government failed to carry out its mandate in managing the budget for the welfare of the people.

The allocation of subsidies in the APBN is perceived by the government as a burden. In fact, this subsidy is directly felt by the community.

Rofik added that the government's plan will have a significant impact on the consumer price index (CPI), which in turn will disrupt the national economy. With the increase in subsidized fuel prices, the country's inflation rate will soar.

"The price increase also has the potential to erode the purchasing power of households, because fuel is one of the people's primary commodities. In the end, it will disrupt the national economy," he concluded.