Oil Prices Rise, Sri Mulyani Estimates Energy Subsidy To Swell This Year

Minister of Finance Sri Mulyani (Photo; Doc. Antara)

JAKARTA - Finance Minister Sri Mulyani Indrawati estimates that energy subsidy spending will increase in the 2024 State Revenue and Expenditure Budget (APBN). This is due to several change parameters ranging from rising world oil prices, lifting oil to lowering rupiah exchange rates against the United States (US) dollar.

"Energy subsidies in this case are expected to increase with several parameters of change, namely oil prices, as well as in terms of lifting and exchange rates," Sri Mulyani said at the Working Meeting of the DPR RI Budget Agency, Monday, July 8.

On the other hand, Sri Mulyani said that the government continues to refrain from increasing fuel and electricity prices when world oil prices rise and the rupiah exchange rate drops in order to maintain people's purchasing power so that the state budget must bear the difference in prices to PT Pertamina (Persero) and PT PLN (Persero).

"Until today, people are still enjoying the relatively stable subsidy price, despite changes in parameters. This causes the state budget to carry the burden," he said.

Sri Mulyani said that the realization of the volume of fuel distribution (BBM) until the first semester of 2024 had reached 7,164.2 thousand kiloliters (KL), down 0.05 percent compared to the realization of 2023 of 7,167.7 thousand K/L.

Meanwhile, the realization of 3 kg LPG reached 3,365.8 million kg, or an increase of 1.4 percent compared to the same period last year at 3,318.2 million kg. As for electricity subsidies to 40.6 million subscribers or an increase of 3.4 percent compared to the same period last year in 39.2 million subscribers.

"For subsidies and energy compensation, ICP price fluctuations, exchange rate depreciation and increase in subsidized LPG and electricity volumes are expected to be reflected in the second semester," he said.