BBM Subsidy Can Create Increased Social Distancing, Word Policy Observer

East Java Mojokerto Police officers patrolled gas stations in the local city. (ANTARA/ HO Polresta Mojokerto)

JAKARTA - Energy Policy Observer, Komaidi Notonegoro, said that the actual subsidy is to realize social justice or to level the welfare of the Indonesian people.

However, he saw that the fuel subsidy as currently in effect actually created a bigger social gap.

He added that the philosophy of subsidies is actually for the poor. The poverty line in the first semester of 2022 is IDR 505,469 per capita per month. Meanwhile, the number of poor people is 26.16 million people.

"If it is divided equally for the poor, which is Rp502 trillion divided into 26.16 million and divided into 12 months, then the total subsidy fund that should be enjoyed is Rp1,599,134 per month per person," said Komaidi, Saturday, September 3.

"Those who have vehicles, cars and motorbikes, of course, are not those who are included in the poverty line, those who ride motorbikes and cars are given fuel subsidies, while those who walk and ride bicycles do not get access to fuel subsidies," he added.

Currently, there is a difference in Pertalite's price gap of Rp. 6,800 per liter from the retail selling price of Rp. 7,650 per liter compared to the economic price of Rp. 14,450 per liter.

Senior economist, Ryan Kiryanto, assessed that the increase in fuel prices needed to be done. However, he suggested that the increase should not be carried out in stages.

"When we were about to go up, we talked about time-determination, I was a bit worried about this psychological effect," he said in a webinar held by Urban Forum.

"This is an understanding of the general public, if you hear the word, it will increase, it is perceived as an increase," Ryan added.

The increase in commodity prices is currently due to perceptions formed in the market due to the news of the increase in subsidized fuel prices.

"There is a spreading effect," Ryan asserted.

Ryan said the government's policy of providing Direct Cash Assistance or BLT to the poor could be a bumper to prevent a slowdown in the economy.

"Even if there is a pressure to go to GDP, it's not too big because there are middle classes, including rich people, they can still withstand the economic slowdown. Indonesia still has strong purchasing power," said Ryan.