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Govt to cut diesel subsidy on July 1, consumer price unchanged
The government will effectively cut the subsidy allocation on diesel fuel (Solar) from Rp 1,000 (7.5 US cent) per liter to Rp 500 per liter on July 1, leaving the allocation to Rp 43.7 trillion or 31.4 percent cut.
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A truck containing subsidized diesel fuel was confiscated in Batam on June 14. It had been repainted as a non-subsidized diesel fuel truck. (tribunnews.com/Eko Setiawan)
T
he government will cut its diesel fuel subsidy allocation from Rp 1,000 ( US$0.075 ) to Rp 500 per liter on July 1. The new Rp 43.7 trillion represents a 31.4 percent allocation decrease.
Energy and Mineral Resources (ESDM) Ministry spokesman Sujatmiko said the cut had been approved by the House of Representative's budgetary board (Banggar).
While fears have arisen surrounding the potential hike in retail price, Sujatmiko guarantees that the retail price will remain unchanged. The low cost of oil on the world market enables the government to cut the fuel subsidy without raising the consumer price, he said.
"From Rp 1,000 to Rp 500. It was approved by Banggar and will be effective as of July 1 […] The price [for subsidized diesel fuel] will remain at Rp 5,150 per liter for the next three months," he told thejakartapost.com in Jakarta on Monday.
The ministry had initially submitted a proposal to cut the subsidy to Rp 750 per liter but House Commission VII, overseeing energy resources and the environment, further reduced it to Rp 500 per liter.
Sujatmiko said this left a subsidy allocation of Rp 43.7 trillion this year, compared to an initial Rp 63.7 trillion. (ags)
