Smart Card to kick in early next year

Andi Haswidi and Ika Krismantari ,  The Jakarta Post ,  Jakarta   |  Fri, 05/23/2008 10:53 AM  |  Business

Energy and Mineral Resources Minister Purnomo Yusgiantoro said Thursday a planned fuel subsidy control "Smart Card" system would take effect January.

"The Smart Cards will be distributed from Sep. 1 until Dec. 31 this year in all Java and Bali regions to acclimatize people with the system," he said.

He said the system would become operational January 2009 following the public awareness campaign.

Under the program, consumers will be issued with a purchasing limit on daily subsidized fuel.

In a statement sent to The Jakarta Post, the ministry's head of legal and public relations division Sutisna Prawira said details of the system were still being decided and that preparations were still under way.

"The production of the smart card will commence after the current supplies and services tendering process is completed," Sutisna said, adding that fuel consumption limits would only apply to subsidized fuel.

Purnomo on Monday said there would be three fuel price categories under the program: A subsidized fuel price for motorcycles and public transportation vehicles, a partially subsidized price for private cars and a non-subsidized price for industrial players.

Sutisna said the three prices would take effect after the government had raised fuel prices by an average of 28.7 percent for all types of vehicles, not as mentioned in the Post's Wednesday May 22 edition, which stated the subsidy system would only apply to private cars.

Purnomo also said private car fuel prices would be gradually raised until they matched global prices, although he did not specify a time frame.

BPH Migas committee member Ibrahim Hasjim said Thursday the three price plan would not take effect during the September-December preparation period as the body would still be developing the technology for the program.

Finance Minister Sri Mulyani said the price increases would cut the government's annual spending on energy subsidies by Rp 64.6 trillion, or from Rp 265.6 trillion a year to Rp 201 trillion.

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