JAKARTA - Energy economy observer from Gadjah Mada University (UGM) Fahmy Guruni said the increase in subsidized fuel prices could have a significant impact on inflation movements, as well as reduce people's purchasing power.
"For example, if it is currently being increased, it will make a significant contribution to inflation which will then reduce purchasing power," said Fahmy when contacted in Jakarta, Friday.
Fahmy hopes that there will be more measurable efforts in making restrictions so that the distribution of subsidized fuel can be more targeted, rather than having to make price adjustments.
Based on the data, he continued, for pertalite and diesel type subsidy fuel, about 60 percent of users are not suitable so they are wrong on target.
Therefore, if the government has succeeded in limiting the subsidy, there will be savings.
Thus, the effectiveness of using subsidized fuel can reduce the subsidized budget burden and do not need to increase fuel prices.
Previously, President Joko Widodo reminded that the current price of pertalite type fuel oil (BBM) is the result of energy subsidies originating from the State Revenue and Expenditure Budget (APBN).
"Our country is still holding back from raising the price of pertalite. We are still strong and we pray that the state budget will still be strong in providing subsidies. If it is not strong, what can we do," said the President in his remarks at the peak of the commemoration of the 29th National Family Day in Medan, North Sumatra.
On this occasion, the President said that geopolitical conditions in Europe had an impact on food prices, oil energy, and gas in all countries.
According to Jokowi, the price of oil before the pandemic was 60 US dollars per barrel, while currently it has doubled to 110-120 US dollars per barrel.
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