Bahlil Asks People To Be Prepared If The Government Raises Subsidized Fuel Prices

Illustration (Photo: Doc. Antara)

JAKARTA - Investment Minister/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia asked the public to be prepared if the government decides to increase the price of subsidized fuel oil (BBM).

"It feels like to hold on to the current fuel price, I have a feeling we should be prepared if, say, the fuel price hike happens," he said at a press conference in Jakarta, Friday, August 12.

Bahlil said that the impact of the government continuing to hold back on fuel price increases would certainly have an impact on the state's fiscal condition which is not healthy because a quarter of the state's revenue must be used for fuel subsidies.

Not to mention, he continued, the current uncertain global economic conditions have caused world oil prices to continue to skyrocket.

He noted that the average world oil price reached US$105 per barrel from January to July 2022.

In fact, the assumption of oil prices in the state budget is only in the range of 63-70 US dollars per barrel.

"Today, if the (oil price) is 100 US dollars per barrel, our subsidy could reach Rp 500 trillion. But if the oil price per barrel is above 100 US dollars, for example 105 US dollars, assuming the dollar exchange rate is Rp. 14,500 to the average the current average is Rp. 14,750, and our quota is from 23 million kilo liters to 29 million KL, so there must be additional subsidies," he explained.

With all these figures, Bahlil said there should be at least Rp500 trillion to Rp600 trillion in subsidy allocations from the APBN for fuel subsidies.

"Rp500-Rp600 trillion is the same as 25 percent of our total state budget revenue used for subsidies. I think this is a bit unhealthy," he said.

Therefore, according to Bahlil, there needs to be public understanding of the current conditions.

He said this could be a shared momentum to work together to keep the country's fiscal condition healthy.

Previously, the government had revised this year's energy subsidies and compensation to Rp502 trillion, consisting of energy subsidies of Rp208.9 trillion, energy compensation of Rp234.6 trillion and underpayment of energy compensation in 2021 amounting to Rp108.4 trillion.