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Govt affirms fuel subsidies won’t exceed allotted budget this year
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Finance Minister Sri Mulyani and Agriculture Minister Syahrul Yasin Limpo during the Joint Finance-Agriculture Ministers Meeting in Washington, DC, on Oct. 11, 2022. (Finance Ministry/-)
T
he government affirms that fuel and electricity subsidies will remain below the quota allotted in this year’s budget despite possible higher consumption due to strong economic activity.
Finance Minister Sri Mulyani Indrawati told reporters on Wednesday that the government expected crude oil prices would continue to decline this year to between US$70 and $80 per barrel, below the assumption of $90 per barrel in the state budget.
Thus this could compensate for the effect of the weakening exchange rate, which is projected to hover around Rp 15,000 per US dollar, much worse than the Rp 14,800 per US dollar anticipated in the state budget.
“This year, we allocated quite a large sum, but the [realization] outlook until the end of 2023 is likely less than we have already set,” Sri Mulyani said.
Read also: Govt relies on inner strength amid external risks with 2024 budget
The ministry projects fuel and electricity subsidies will consume Rp 352.2 trillion (US$22.95 billion) this year, including spending on compensation, payable to state-owned energy firms for selling their products below market price.
However, this figure is higher than the ministry mentioned in February, where it said the government had allocated Rp 339.6 trillion, as quoted from Bisnis.com.
