Impact Of Fuel Price Adjustments, Subsidy Budget Hemat Rp33.23 Trillion

Photo by Hanindito Prabandaru on Unsplash

JAKARTA - Reformer Institute assesses that the new price of fuel oil (BBM) has made the government save up to Rp33.23 trillion.

If detailed, Pertalite's compensation budget savings will be obtained until the end of the 2022 budget year of around Rp. 23.43 trillion.

Meanwhile, subsidized budget savings or subsidized solar compensation is around Rp. 9.8 trillion.

This calculation takes into account the addition of the pertalite quota to 29.91 kl and solar amounting to 17.83 kl on 3 October.

"In terms of calculation, the total subsidized budget savings or compensation for pertalite and diesel subsidies until the end of 2022 is around IDR 33.23 trillion," the Reformer report wrote, Tuesday, October 11.

Currently, Pertalite is selling at a price of Rp. 10,000 per liter, up from Rp. 7,650 per liter. Meanwhile, diesel subsidized fuel from Rp. 5,000 rose to Rp. 6,800 per liter.

However, non-subsidized fuel Pertamax received a price reduction on October 1. Initially, BBM RON 92 was priced at Rp14,500 per liter. Now Pertamax is sold for Rp13,900 per liter.

Taking into account the savings made from price adjustments that have been made, Reformer noted that there is still an additional fuel compensation budget requirement of around Rp29.49 trillion.

However, they said that the decline in non-subsidized fuel prices would likely not be followed by a decrease in pertalite and diesel prices in the near future.

Probabilities for price reduction will be open if the government's objectives improve purchasing power and accelerate the acceleration of post-pandemic economic growth become a top priority.

"However, if the government is objective in maintaining the health and productivity of the 2022 State Budget, the price reduction opportunities for both types of fuel are relatively small," they said.