Minister of Finance Sri Mulyani Indrawati stated that the realization of subsidy spending and energy compensation throughout 2022 reached Rp551.2 trillion, which was intended to maintain people's purchasing power in the midst of soaring global prices.
"APBN remains an extraordinary shock absorber for subsidies and compensation which is a protection for our society because oil prices have jumped unusually high," he said at the KITA State Budget Press Conference in Jakarta, quoted from Antara, Tuesday, January 3.
The realization of IDR 551.2 trillion consists of compensation of IDR 379.3 trillion and subsidies of IDR 171.9 trillion.
Sri Mulyani said the amount of subsidies and compensation of Rp551.2 trillion was three times the initial ceiling of Rp152.5 trillion which had been added to Rp502.4 trillion.
He explained that initially the average price of Indonesian crude oil (ICP) was estimated at 63 US dollars per barrel, but it turned out that due to the geopolitical situation between Russia and Ukraine it jumped to 126 US dollars per barrel and fell back to 80 US dollars per barrel.
"Overall one year our ICP is at 97 US dollars per barrel or higher than 63 US dollars per barrel," he said.
Energy prices, especially volatile oils, require the government to increase subsidies and compensation because if not, then oil prices could rise four times.
In detail, the realization of subsidy expenditures of IDR 171.9 trillion includes IDR 15.2 trillion for fuel, IDR 100.4 trillion for LPG and IDR 56.2 trillion for electricity, while compensation of IDR 379.3 trillion includes IDR 307.2 trillion for fuel and IDR 72.1 trillion for electricity.
The compensation budget is given to PT Pertamina and PT PLN in order to maintain people's purchasing power and support economic recovery.
"Of course, not for Pertamina and PLN itself, but for people in the form of LPG, Pertalite, diesel, and everything is subsidized," said Sri Mulyani.
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