The government may spend Rp 300 trillion (US$32.55 billion) on energy subsidies next year, or close to a 50 percent rise from this year, assuming oil prices average $140 per barrel, Finance Minister Sri Mulyani Indrawati said Tuesday.

The country uses the so-called Indonesian Crude Price (ICP) as its oil price benchmark, which is usually slightly lower than the international benchmarks.

"Looking at the trend (in oil prices) until July, we may consider setting the (ICP) at $140 per barrel," Sri Mulyani said.

Oil prices rose Tuesday with light sweet crude in New York climbing 91 U.S. cents to $142.28 per barrel after slumping $3.92 on Monday to close at $141.37 on the New York Mercantile Exchange, AFP reported.

Brent North Sea crude Tuesday climbed $1.09 to $142.96 after dropping $2.55 to close at $141.87 per barrel on Monday in London. On May 3, oil prices in New York struck a record high of $145.85 and in Brent hit an all-time peak of $146.69.

For this year, the government has estimated energy subsidy allocations -- including fuel and electricity subsidies -- at Rp 200.6 trillion, assuming the ICP to be $110 per barrel. The estimate is a revision of an earlier Rp 187.1 trillion state-budget projection, which set the ICP at $95 per barrel.

The fuel subsidy accounts for about 65 percent of the total energy subsidy.

In contrast, the government for this year sets aside Rp 100 trillion for programs dedicated to empower poor households, including food subsidies.

The House of Representatives has suggested the government to cap the disparity between subsidized and non-subsidized fuel prices to limit state spending.

"We may cover (fuel subsidy) at a certain amount. The disparity between international and domestic (fuel) prices is getting higher -- about 30 percent or 40 percent," Sri Mulyani said.

Critics have said the high disparity between fuel sold domestically and on the international market encourages smuggling.

The government on May 24 raised the price of subsidized fuels by an average 28.7 percent in a bid to reduce spending and help discourage fuel consumption amid soaring global oil prices.

However, as of June, domestic fuel consumption had passed 16 million kiloliters, almost half of the government's estimate set in the revised 2008 budget of 35.5 million kiloliters.

Anggito Abimanyu, the finance ministry's head of fiscal policy, said earlier total fuel consumption this year might reach 41 million kiloliters as people usually consumed more fuel in the year's second semester.

"We see (fuel) consumption is irresistible with the high disparity," Sri Mulyani said.

Despite high oil prices and high fuel consumption, the current administration has promised it will not raise the prices of subsidized fuels until its term ends in 2009, when the country holds general elections.

Sri Mulyani said high oil prices might affect Indonesia's economic growth.

"The risk to economic growth will be higher. We will maintain (the estimate for this year's economic growth) at 6.2 percent, but it will likely be below that," she said.

The economy is expected to grow by between 6 and 6.4 percent in 2008. It grew 6.4 last year.

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