Respond To The Results Of The G20 Agreement Regarding Subsidy Elimination, Here's The Observer Said

Illustration (Photo: Doc. Antara)

JAKARTA - The G20 Summit (KTT) which was held in Bali on November 15 and 16 resulted in a number of agreements.

On the 12th point of the agreement, G20 member countries agreed to cut fuel subsidies which are considered to encourage fuel consumption to be more wasteful.

"We will step up our efforts to implement commitments made in 2009 in Pittsburgh to gradually trim and rationalize, in the medium term, inefficient fossil fuel subsidies, which encourage more wasteful consumption," reads citation point 12.

Responding to the sound of this agreement, economist from Gadjah Mada University (UGM) Fahmyani said this agreement might be carried out, but the government should consider changing the type of fuel oil (BBM) that was subsidized.

"Solar and Pertalite, which are currently subsidized as not in accordance with Euro 4, should be removed but the government must still provide subsidies," he told VOI, Monday, November 21.

He added that the government has temporarily removed subsidized fuel and subsidized diesel fuel and provided subsidies to Pertamax fuel that is cleaner.

According to him, eliminating fuel subsidies is not the right thing to do because it violates the constitution.

"So, what I mean to remove is dirty fuel such as Pertalite and Solar, but the subsidy should not be deleted because it is a constitutional mandate that the state is present by providing subsidies. Later, subsidies will be given to Pertamax consumers. Second, subsidy costs are also used for the development of EBT so that in time we use iron energy," explained Fahmy.

He also compared the provision of subsidies by neighboring countries such as Malaysia which even provided subsidies to RON 95 fuel.

"Malaysia alone for RON 95 consumers can also be subsidized. Indonesia, which has a constitutional mandate, must still be given," he concluded.