Subsidized BBM Realization Reaches 99 Percent, Pertalite-Solar Price Increase Is Considered Still Reasonable

Member of the BPH Migas Committee Abdul Halim. Photo: Screen Caption/Theresia Agatha

JAKARTA - Member of the Downstream Oil and Gas Regulatory Body (BPH Migas) Committee, Abdul Halim, said that the fuel subsidies (BBM) provided by the government are currently considered to be on target. This can be seen from the realization of the subsidized fuel quota in 2022 which reached 99 per cent.

"Thank God, in 2022 the government has provided extraordinary policies, especially post-pandemic. Originally the diesel subsidy was set at 15.1 million kiloliters", he said in an online INDEF discussion, on Tuesday, February 14.

According to Abdul, with rapid growth, the government has increased the subsidy quota to two million kiloliters and will reach 17.83 million in 2022.

"It has been distributed by 99 per cent. This also applies to Pertalite. Initially, this type of RON 90 fuel had a quota of 23 million, then added six million to 29 million kiloliters", he said.

He added, with these subsidies, the government could save the state revenue and expenditure budget (APBN) from subsidized fuel consumption. "This is right on target, we can save the budget", said Abdul.

On the same occasion, the Head of the APBN Policy Center for the Fiscal Policy Agency (BKF) Wahyu Utomo said that the high subsidy and compensation budget in 2022 was a consequence of the role of the APBN as a shock absorber.

"The government remains committed to increasing targeting accuracy, one of which is through the implementation of tariff adjustments for customers who are well-to-do households and all government groups", he said.

Nevertheless, said Wahyu, there are still challenges to be encountered, namely the risk of contingent liabilities in energy subsidies. "This means that price or tariff adjustment policies cannot be implemented, resulting in compensation of IDR 524.6 trillion in 2017-2022", he explained.

Then, high commodity prices have led to an increase in the need for energy subsidies and compensation, and LPG and Solar are still being distributed openly.

"Then, there is also the challenge of the validity of data on people who are entitled to receive subsidies that are not yet accurate. Then, the need for the budget will increase in line with the government's commitment to providing support for EBT", he added.