JAKARTA - The government has officially increased the price of Pertalite and Solar fuel oil (BBM) to Rp10,000 per liter and Rp6,800 per liter, respectively. President Jokowi accompanied by a number of his ministers announced it directly.
President Jokowi admitted that the government had been able to withstand the domino effect of the world oil turmoil so as not to shake the country. But the state's money that was 'fired' for subsidies continued to swell.
And more than 70 percent of subsidies are actually enjoyed by community groups who are able, namely private car owners.
The following is President Jokowi's full statement when announcing the price of fuel increase:
Bismillahirrahmanirrahim.
Assalamu'alaikum warahmatullahi wabarakatuh, Good afternoon, Salam sejahtinya bagi kita semua, Om Swastiastu, Namo Buddhaya, Selamat keduduanya.
The government has tried its best to protect the people from the turmoil in world oil prices. I actually want the domestic fuel price [fuel oil] to remain affordable, by providing subsidies from the state budget. However, the subsidy budget and compensation for fuel in 2022 has tripled, from Rp152.5 trillion to Rp502.4 trillion and it will continue to increase. Moreover, more than 70 percent of subsidies are actually enjoyed by capable community groups, namely private car owners.
The state's money should be prioritized to provide subsidies to underprivileged communities. And at this time the government must make decisions in difficult situations. This is the government's last choice, namely diverting fuel subsidies. Thus, the price of several types of fuel that have received subsidies will undergo adjustments.
Some fuel subsidies will be diverted for more targeted assistance. BBM Direct Cash Assistance (BLT) amounted to Rp12.4 trillion which was given to 20.65 million underprivileged families, amounting to Rp150 thousand per month, and starting to be given in September for four months. The government also prepared a budget of Rp9.6 trillion for 16 million workers with a maximum salary of Rp3.5 million per month in the form of Wage Subsidy Assistance provided of Rp600 thousand.
I have also ordered local governments to use two percent of the General Transfer Fund of IDR 2.17 trillion, for public transportation assistance, online motorcycle taxi assistance, and for fishermen.
The government is committed that the use of subsidies which are people's money must be right on target. Subsidies must be more beneficial to the underprivileged.
Furthermore, I ask the Minister of Energy and Mineral Resources, the Minister of Finance, and the Minister of Social Affairs to provide a more detailed explanation.
Thank you.Wassalamu'alaikum warahmatullahi wabarakatuh.
Please, Minister.
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