Social Support Assistance Is Considered More Appropriate Than Fuel Subsidy

JAKARTA - Former Minister of Research and Technology / Head of the National Research and Innovation Agency, Bambang Brodjonegoro, is of the view that social cushion policies are more appropriate than fuel subsidies (BBM) to ensure that aid is right on target.

“We should look ahead to not always be bothered by the issue of rising fuel prices or whether or not subsidies need to be added. It would be better if the government changed the intervention model, no longer subsidizing prices," said Bambang Brodjonegoro at the Moya Institute National Webinar entitled "Adjusting Fuel Prices: Problem or Solution" quoted by ANTARA, Friday, September 2

According to him, fuel subsidies are more vulnerable to targeted aid due to the large number of Indonesians who already own cars but still use subsidized fuel.

The social assistance system that is directly targeted, he said, is more relevant than the injection of subsidies for goods, such as fuel oil (BBM). All parties, both the government and the community, should change the paradigm from subsidies for goods or products to direct targeted assistance.

"As long as the data (population) is complete," said Bambang.

Regarding the plan to adjust the fuel price, the government and Pertamina are encouraged to carry out good public communication to explain economic prices in the face of people's purchasing power.

The Chancellor of the Institute of Technology and Business, Ahmad Dahlan (ITB-AD), Mukhaer Pakkanna, revealed that when the government implements the fuel price adjustment, it will be carried out transparently so that the wider community can understand.

Meanwhile, political observer and strategic issuer Imron Cotan said the government needs to ensure that it is still able to maintain people's purchasing power if the subsidized fuel price adjustment is made.

The social support consists of direct cash assistance in stages to underprivileged communities in the amount of IDR 600 thousand per family, a wage subsidy of IDR 600 thousand per worker per month to workers who have a maximum salary of IDR 3.5 million per month, as well as transportation subsidies, including motorcycle taxis whose funds are taken as much as IDR 2 percent of the General Transfer Fund.

"The social assistance targeting the right community groups is an important element in adjusting subsidized fuel prices so that justice can be served because subsidies are not enjoyed by groups who are not entitled to it," he said.

Moya Institute Executive Director, Hery Sucipto, said that the Russia-Ukraine war had seriously damaged global supply chains, causing an energy crisis for all countries, including Indonesia.

Such a situation makes Indonesia have to be realistic in dealing with it so that the state budget is maintained as an instrument for driving the national economy, he said.