Support The Government's Decree To Salurize BBM BLT, Kadin: In The Long Term, Indonesia Must Leave Subsidized Fuel Dependence

Chairman of Kadin Arsjad Rasjid. (Photo: Doc. Antara)

JAKARTA - The Chamber of Commerce and Industry (Kadin) assesses that the government's steps to allocate 25 percent of the State Revenue and Expenditure Budget (APBN) for social assistance (bansos) or direct cash assistance (BLT) to reduce the impact of rising oil fuel prices (BBM) are appropriate.

Chairman of Kadin Arsjad Rasjid stated that this was so that Indonesia could get out of the snares of bad oil fuel subsidies for the environment.

"In addition, such a large fuel subsidy fund will have a big impact on the future if it is allocated to build 200 thousand elementary schools (base schools), 40 thousand health centers and 3 thousand hospitals in 3T (lagging, leading, outermost) areas," Arsjad said in his statement quoted by Antara, Monday, September 12.

Currently, he added, to prevent social impacts for vulnerable community groups, the government is pouring out BLT for pre-prosperous families, vulnerable groups such as fishermen and farmers and the poor as well as wage subsidy assistance (BSU) for employees to maintain their purchasing power and mobility.

"The government itself has increased the allocation of social assistance by Rp. 24.17 trillion this year. That is very appropriate," he said.

From the point of view of the business world, Arsjad admits that the increase in fuel prices will certainly lead to price increases in several sectors, especially transportation and logistics. As a result of rising logistics costs, goods and services will also increase, especially in MSMEs that are dependent on high fuel.

In terms of the percentage increase in Pertalite subsidized fuel by 30 percent and diesel by 32 percent, he added, with the contribution of fuel to inflation by 4 percent in July 2022, the adjustment to the increase in product prices is around 12-13 percent from the original price.

He said large and moderate-scale industries would not be too affected by non-subsidized fuel. However, for the MSME scale, of course, it will immediately adjust, so there needs to be incentives such as KUR interest subsidies, tax and capital incentives.

After the announcement of the increase in fuel, the labor group and the union immediately reacted by holding a demonstration, responding to this, Arsjad assessed that regulations regarding salary increases were contained in PP No 36 of 2021.

According to him, the determination of the minimum wage for 2023 is considered more difficult, apart from the fact that the increase is relatively small, it must also take into account the impact of inflation due to the increase in fuel.

"The company's productivity is in danger of experiencing a decline, while the wage rate is urgent to increase. Therefore, social assistance in the form of BLT, BPNT, PKH and incentives in MSMEs in order to minimize the effect on reducing people's purchasing power. The government must increase the minimum wage in line with soaring inflation," he said.

For long-term plans, according to him, dependence on subsidized fuel must be released slowly because the global world has started to move towards new and renewable energy that is better for environmental sustainability and the business world.

He said Indonesia, which has natural resources that can be used as new renewable energy sources such as geothermal, wind, solar, hydro and several mineral sources such as nickel, should be at the forefront of the renewable energy transition process.

Jangan sampai APBN kita terus tergerus untuk subsidi energi fosil yang sudah ditinggalkan negara-negara maju, tambahnya, APBN untuk sektor energi harus digunakan ke masa depan dengan membangun ekosistem ekonomi hijau seperti industri kendaraan listrik serta ekonomi digital dengan membangun infrastruktur digital.

"Of course, this transition must be supported by other fiscal policies such as incentives and tax reductions for business actors in the renewable energy sector so that the energy transition can be accelerated," he said.