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Jakarta Post

Living without fuel subsidies

Jakarta   /   Wed, April 6 2011   /  08:00 am

Oil subsidies have become a serious topic for the government. Both the coordinating minister for the economy and finance minister do not hesitate to speak openly about a possible reduction of oil subsidies.

This is understandable because Indonesia’s status as a net oil importer since 2003 has stirred a panic every time world oil prices spike. The state of panic will be more severe if price volatility far exceeds the estimate used to draft the state budget.

While the government will not subsidize high-octane Pertamax and promises to improve the distribution of subsidized gasoline, Premium, the fear of turmoil in world oil prices continues.

This shows that the government is fully aware and more realistic about increasing oil consumption, while realizing that oil production is declining.

Based on the latest British Petroleum data released in 2010, Indonesia‚Ä...