Fuel Subsidy Assessed To Be Evaluated Reduce Fiscal Load

Photo by Hanindito Prabandaru on Unsplash

JAKARTA - The Dean of the Faculty of Economics and Business, University of Indonesia (FEB UI), Teguh Dartanto assessed that fuel subsidies need to be evaluated. He said it could reduce the fiscal burden.

"In my opinion, the evaluation of fuel subsidies deserves to be done because it can reduce the fiscal burden," said Teguh, Monday, August 29.

Teguh assesses that the impact of inflation is quite burdensome for the community even though fuel has not increased. This can be seen from the increase in the price of a number of basic necessities in the market.

"This means, in terms of social protection or social cushioning, although there has been no evaluation of fuel prices, the price of basic necessities has increased," he said.

Teguh does not deny that there will be a negative impact when subsidies are reduced and fuel prices are increasingly expensive. However, he said it could be overcome by the government's way of preparing a social protection scheme.

He said the social protection scheme would later maintain purchasing power because most of Indonesia's economy depends on public consumption, as well as to maintain positive momentum for Indonesia's economic recovery.

"To overcome the negative impact, the government must prepare a social protection scheme or compensation for the poor and vulnerable to food and energy," said Teguh.

Another step the government can take is to provide a special mechanism for community members to volunteer as recipients of social assistance. This will help the distribution of social assistance more targeted and reach.

"I have always pushed for a mechanism, for example on demand application for social assistance. This means that people who really suffer from not being registered are allowed to register. From there there is verification," said Teguh.