JAKARTA, Nov. 5 (Xinhua) -- The fuel subsidy in the Indonesian state budget
is estimated to hit 90 trillion rupiah this year (about 9.8 billion U.S.
dollars) against the initial projection of 55 trillion (6 billion dollars) due
to soaring oil prices, an official said Monday.
Indonesia must cope with the global oil shocks by either increasing
domestic fuel prices or launching energy conservation campaign.
"But the government would not go to the first option (price hike) because
of its potential massive social effects, so we choose the second option,"
Minister of Energy and Mineral resources Purnomo Yusgiantoro said in a seminar
on renewable energy development here.
Purnomo said the average Indonesian crude oil price already hit72 dollars
per barrel, far above the projected 60 dollars per barrel in the state budget.
The government allocates subsidies for transport fuel products but allows
market pricing for high-octane fuel products, fuel for industrial uses and for
The subsidized gasoline, for instance, sells at a mere 4,500 rupiah (49
cents) a liter.
Subsidized fuel consumption in Southeast Asia's only OPEC member is
predicted to reach 38.2 million kiloliters this year, exceeding the government's
quota of 36.1 million kiloliters.
In nine months to September, fuel consumption already reached 28.5 million
kiloliters, comprising gasoline 13.09 million kiloliters, diesel fuel 8.01
million kiloliters and kerosene 7.4 million kiloliters, according to data from
the Oil and Gas Executive Body (BP Migas).