ESDM Minister Arifin Tasrif Says The Government Will Spend Rp320 Trillion Budget For Energy Compensation

JAKARTA - Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said the government was at risk of spending IDR 320 trillion for subsidies and energy compensation due to rising world oil prices.

"If world oil prices stay at their current level, the government risks spending IDR 320 trillion for subsidies and compensation for fuel and LPG. That doesn't include electricity, maybe the electricity won't be that big," he said in a statement quoted by Antara, Monday, April 18.

Based on the assumption of the State Revenue and Expenditure Budget (APBN), the current price of Indonesian crude oil or ICP is only set at 63 US dollars per barrel with the calculation of the allocation of subsidies and compensation for BBM and LPG of around IDR 130 trillion.

The price of crude oil, which is now perched above USD 100, has forced the government to prepare additional funds of IDR 190 trillion for energy subsidies.

Minister Arifin reminded that currently, the selling price of subsidized fuel and LPG is far from the economic price due to the impact of soaring world oil prices.

He also appealed to the public to use fuel according to their ability, so that the allocation of subsidized fuel and LPG is not eroded and the distribution is more targeted.

"The misuse of subsidized fuel will increase the financial burden on the state. The public is asked to participate in monitoring and reporting if they find irregularities in the distribution and use of subsidized fuel," said Arifin.

Currently, the government has legal instruments to ensnare perpetrators of abusing subsidized fuel and LPG with a maximum imprisonment of six years and a maximum fine of IDR 60 billion.

The sanctions are contained in the Job Creation Law Number 55 of 2020 and Government Regulation Number 36 of 2004 which are derivatives of the Oil and Gas Law of 2001 concerning downstream oil and gas business activities.