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RI boosts social aid to combat subsidized fuel inflationary pressure
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Subsidy addicts: Motorists line up for subsidized RON-90 Pertalite fuel at a gas station in Bogor city, West Java, on Aug. 9. The government has begun discussions on whether to increase the price of Pertalite soon. (Antara/Arif Firmansyah)
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he government is set to roll out three social aid schemes worth US$1.62 billion (Rp 24.17 trillion) in a bid to strengthen people's buying power amid the risk of inflationary pressure, as a result of an expected subsidized fuel price hike.
Although not stating clearly that the government would soon increase the subsidized fuel prices, including Pertalite gasoline and Solar diesel, Finance Minister Sri Mulyani Indrawati explained the additional social aid fund was a part of the energy subsidy-diversion strategy, as instructed by President Joko Widodo.
She elaborated that the social assistance would be divided into three types, namely direct cash transfers (BLT), wage subsidies and a regional transfer budget allocation for public transportation.
"The first aid will be distributed to 20.65 million beneficiary groups in the form of direct cash transfers worth Rp 12.4 trillion in total. It will be disbursed four times, Rp 150,000 per person, by the Social Affairs Ministry," Sri Mulyani said at a press conference on Monday.
The second aid package would be wage subsidies worth Rp 600,000 per person, aimed at 16 million workers earning a maximum salary of Rp. 3.5 million a month.
In this regard, she added, the Manpower and Transmigration Ministry would soon release official instructions for the disbursement of the wage subsidy.
“Third, the Home Ministry and the Finance Ministry will also issue a new regulation to allocate 2 percent of the regional transfer funds – which includes the general allocation fund [DAU] and revenue-sharing fund [DBH] – to protect the public transportation sector, such as motorcycle taxis, as well as fishermen in the regional level.”
