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Govt, House agree to lower diesel subsidy rate, larger volume of subsidized gas
The government and lawmakers have agreed to a lower subsidy rate for diesel fuel (Solar) and to increase the volume of gas in a hearing to determine energy budget assumptions for 2020.
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Energy and Mineral Resources Minister Ignasius Jonan (left) attends a hearing at the House of Representatives in this file photo. (Antara/Agung Rajasa)
The Energy and Mineral Resources Ministry and House of Representatives Commission VII, which oversees energy, have agreed to cut the diesel fuel subsidy next year and channel the savings to provide more gas to the people.
The subsidy for diesel fuel, sold under the Solar brand, is to be cut to Rp 1,500 (11 US cents) per liter next year in order to increase the volume of subsidized liquefied petroleum gas (LPG).
Lawmaker Maman Abdurrahman from the Golkar Party said during the House hearing on June 20 that the decision was made in consideration of the high demand for subsidized LPG and people’s difficulty in accessing it.
“Looking at the Solar fuel subsidy, one cannot separate it from the ongoing efforts to convert kerosene to gas. Hence, we proposed transferring [a portion of the] Solar subsidy, some of which is enjoyed by non-eligible consumers, to subsidize the three-kilogram LPG canisters,” Maman said.
The hearing ended with both the government and the House agreeing to a fuel subsidy of Rp 1,500 per liter of Solar next year. It also agreed to increase the 2020 quota for subsidized diesel to 15.31 million kiloliters, up 5.5 percent from this year's quota of 14.5 million kl.
