The Increase In Fuel Prices Does Not Have An Impact On Reducing Congestion

JAKARTA - Minister of Finance (Menkeu), Sri Mulyani Indrawati stated that the increase in subsidized fuel oil (BBM) prices by 30 percent was not significant in reducing congestion.

This is because traffic jams are still occurring on the streets of the capital city of Jakarta even though fuel prices have risen.

The government raised the price of Pertalite from IDR 7,650 per liter to IDR 10,000 per liter. Then, Solar subsidy from IDR 5,150 per liter to IDR 6,800 per liter.

In addition, Indonesia's economic growth also persisted above 5 percent until entering the third quarter of 2022. Although, subsidized fuel prices experienced an increase due to the surge in world oil prices due to the conflict between Russia and Ukraine.

"Three consecutive quarters the economy grew above 5 percent, even though (the price) rose 30 percent of fuel. It was still jammed everywhere," said Sri Mulyani, Saturday, October 29.

Sri Mulyani said that the trend of national economic recovery was maintained even though the subsidized fuel price had been adjusted and could not be separated from the good function of the 2022 State Revenue and Expenditure Budget (APBN).

The reason is, the APBN has been designed in such a way to be more flexible in order to reduce shocks that have the potential to hinder national economic recovery.

"This illustrates our economy is still (strong). Because of the big shock earlier in the absorber by the big state budget," he said.

Previously, the government of Joko Widodo or Jokowi finally increased the price of subsidized fuel oil (BBM). Pertalite fuel prices rose to Rp10,000 per liter from the previous Rp7,650 per liter. The price of diesel rose from Rp5,150 per liter to Rp6,800 per liter. Then the price of Pertamax rose from Rp12,500 to Rp14,500 per liter.

President Jokowi admitted that the decision to adjust subsidized fuel prices was a tough thing. But according to him, what is the power, at this time the condition of the State Budget (APBN) is deemed no longer able to bear this.

"The government has tried its best to protect the people from the turmoil in world oil prices. I actually want domestic fuel prices to remain affordable from the state budget subsidies," Jokowi regretted at the beginning of last September.

"This is the government's last choice, namely diverting fuel subsidies so that the prices of several types of fuel that have received subsidies will experience adjustments, and some fuel subsidies will be diverted for more targeted assistance," said President Jokowi.