The Democratic Party and the Golkar Party declared their support for the fuel restriction plan in a hearing between House Commission VII and the Energy and Mineral Resources Ministry on Monday.

PDI-P legislator Effendi Simbolon, who is the House Commission VII deputy chairman, criticized the plan, saying that the policy would put too heavy a burden on private car owners because they would have to buy non-subsidized fuels, which were almost double the price of subsidized fuels.

“I also don’t know why on earth the 2012 State Budget Law stipulates that the restriction policy has to be started in April 2012. Commission VII never agreed to that clause,” he said at the hearing.

However, commission chairman Teuku Riefky Harsya from the Democratic Party said that the government and the House were obliged to abide by the mandate of the 2012 State Budget Law to limit subsidized Premium fuel in April.

“The law doesn’t give room for the price increases, therefore if there is a suggestion to increase the price, we have to revise the law first,” he told reporters.

Another legislator at the commission, Astir Dainy Tara from the Golkar Party, backed the government’s plan. However, he warned that the government must strengthen supervision in the field, particularly of converter kits that the government plans to sell to allow cars to run on gas-based fuels.

“We don’t want to see fake converter kits distributed in the market; the risk of explosions would be higher than with the 3-kilogram liquefied petroleum gas [LPG] canisters. We want the government to strengthen coordination with the police,” he said.

Starting in April, the government plans to allow only public transportation vehicles, motorcyclists and fishermen to purchase subsidized Premium fuel. The plan will be implemented in Java and Bali this year, followed by other islands.

However, the plan has drawn serious criticism from various stakeholders who say that it would be fairer if the government increased the price of Premium fuel by Rp 1,000 (11 US cents) from the current Rp 4,500 instead of banning private cars from consuming it.

Energy and Mineral Resources Minister Jero Wacik said that the subsidized fuels restriction plan would help save up to 6.21 million kiloliters from an estimated subsidized fuel consumption of 43.7 million kiloliters this year.

“If the ban and conversion programs are to be implemented, the government could cut the subsidized fuel consumption by 6.21 million kiloliters to 37.5 million kiloliters,” he said.

However, Jero did not believe the consumption of subsidized fuels would sink below the quota of 37.5 million kiloliters in 2012, citing the pace of car and motorcycle sales last year.

“In 2011, 7 million new motorcycles and more than 800,000 cars were sold,” he said.

To minimize the impact of the policy for small and medium enterprises (SMEs), Jero said he would allow SME vehicles to change their plate number from black to yellow to allow them to access subsidized fuels.

Separately, Finance Minister Agus Martowardojo revealed that Rp 965 billion had been allocated from the 2012 budget and other sources to support the government’s policy to boost the utilization of gas-based fuels in the transportation sector. The funds will be used to build infrastructure to provide so-called liquid gas for vehicles and compressed natural gas.

The funds will come from state enterprises involved in the programs, accumulated budget surplus (SAL) and from additional funds allocated through the revision of the 2012 state budget.

“We are now discussing adding more funds for more specific programs,” he said.

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