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Jakarta Post

Govt agrees to spend extra Rp 63.7t on energy subsidy

  • Esther Samboh

    The Jakarta Post

Jakarta   /   Wed, December 14 2011   /  09:45 am

The government has agreed to increase the energy subsidy budget by Rp 63.7 trillion (US$7 billion) for fuel and electricity because consumption has surpassed the state budget allocation.

Finance Minister Agus Martowardojo said on Tuesday that the fuel subsidy would balloon to Rp 168 trillion versus the Rp 129.7 trillion planned in the revised 2011 state budget. The electricity subsidy also soared to Rp 91 trillion from the government’s initial allocation of Rp 65.6 trillion.

This is the second time that the government has increased the fuel and electricity subsidy for the year. Government officials have cited smuggling, surging global oil prices and increasing consumption as reasons for the soaring energy subsidy, particularly for fuel.

“We predict [subsidized fuel consumption] will reach 41.9 million kiloliters from the planned 40.4 milion kiloliters. We are dis...