So That The State Financial Weight Doesn't Get Heavier, An Energy Subsidy Is Needed That Is Right On Target For Incapable Community Groups

Illustration. (Photo: Doc. Antara)

JAKARTA - The energy subsidy scheme that is right on target for the community group is unable to urge it to be implemented because otherwise the government's subsidy burden will continue to swell and burden state finances. The magnitude of fuel consumption subsidized by the community is able to be caused by the current subsidy mechanism being open and given to energy products. "This means that anyone can access the subsidized fuel without restrictions,” said Bank Permata Chief Economist, Josua Pardede in a statement in Jakarta, reported by Antara, Tuesday, August 30. The exact fact that the energy subsidy, especially fuel oil (BBM) was conveyed by the Minister of Finance Sri Mulyani Indrawati, last week. The diesel subsidy circulating in the 89 percent market is enjoyed by the business world. As for the Pertalite type assignment fuel, the subsidy is enjoyed by 86 percent of the wealthy. As a result of the inappropriate subsidy, continued Josua, subsidized fuel quotas continue to be sucked in and have implications for increasing the subsidy budget from the government. This condition has increased badly amid the increase in world oil prices which still last above 90 US dollars per barrel, far above the macro assumption in the 2022 State Budget of 63 US dollars per barrel. Seeing these conditions, Josua advised the government to switch to setting fixed subsidy values, so that market prices from fuel can fluctuate according to the movement of world oil prices. With the number of subsidies set fixed, the subsidy budget in the APBN does not fluctuate. This policy needs to be strengthened by budget flexibility for social protection. The goal is to increase the social protection budget in line with the increase in world oil prices. "With this policy, we assess that budget allocations will be more targeted at the most vulnerable people who are registered as recipients of social protection/assistance," said Josua. Furthermore, he said, the government needs to continue to strengthen the data on recipients who are entitled to subsidized fuel through digitalization. In the future, with the position of recipient data that is entitled to be complete, the government can slowly increase oil prices to market prices or provide subsidies but with a fixed amount so that the health of the budget can be maintained. He added that the proposed subsidized fuel restriction mechanism through the MyPertamina apps is quite good and can limit the amount of use by the rich. Through digitization, the MyPertamina apps can limit the amount of consumption per vehicle, as well as the type of vehicle that can consume subsidized fuel. "Pertamina needs to improve coordination with Korlantas Polri regarding vehicle data per number plate, as well as matching population data and poverty that can cooperate with TNP2K or the Ministry of Social Affairs and the Ministry of Home Affairs. Thus, subsidized fuel can be distributed on target," he said. Josua argues, if you look at the current psychological condition of the community, the psychological figure of fuel prices is at the level of Rp. 10,000 to reduce the burden of fuel subsidies so that the subsidy value in the APBN does not swell to Rp. 700 trillion, or remains Rp. 502.6 trillion. "In terms of purchasing power, we calculate the direct impact of Pertalite's increase of 30.72 percent to inflation (Pertalite proportion 80 percent of total gasoline) of 0.93 percent. For indirect impact, we estimate that it will be half of direct impact or around 0.47 percent," said Josua. Josua reminded that what is also important is that efforts to control subsidized fuel consumption can be carried out if the legal umbrella from the government already exists. Thus, the revision of the Presidential Regulation related to subsidized fuel control need to be issued immediately by the government considering that the subsidized fuel quota is estimated to run out in October or November 2022.