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Govt to restrict subsidized fuel sales starting Aug 17, Luhut says
The government has mulled restricting the purchase of subsidized fuel since 2022 but the plan was delayed amid concerns it would impact the purchasing power of Indonesians.
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Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan talks during an interview at his office in Jakarta on Jan. 8, 2020. (Reuters/Ajeng Dinar Ulfiana)
T
he government wants to restrict purchases of subsidized fuel starting Aug. 17 by making it available only to eligible customers, in a move aimed at reducing the burden on this year’s state budget.
Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said the government was moving toward more targeted subsidies, implying the subsidized fuel would soon be limited to only eligible beneficiaries.
“We will reduce the number of people who are not entitled to subsidies [from benefitting from it]. We are making the calculations," Luhut said on his personal Instagram account on Tuesday, saying that state-owned oil and gas company Pertamina had been preparing the provisions needed to conduct the change.
The government has mulled restricting purchases of subsidized fuel since 2022 as the fuel subsidy overshot the budget allocation following skyrocketing international oil prices and the weakening of the rupiah exchange rate against the US dollar after the outbreak of the war in Ukraine.
Initially, the plan would require vehicle owners to register themselves via a smartphone app so that Pertamina could ensure only eligible customers bought the subsidized fuel.
The scheme would apply to Pertalite and Solar, Pertamina’s subsidized RON-90 gasoline, and diesel fuel with a cetane number (CN) of 48.
However, the plan was delayed as the government opted instead to hike subsidized fuel prices in 2022, which had remained unchanged for years.
