Despite massive subsidies from the government, the price of all types of fuel in Indonesia is set to rise soon. Indonesia’s investment minister Bahlil Lahadalia urged the countrymen to be prepared for the upcoming situation.
In a press conference in the capital Jakarta on Friday, the minister said, ‘The state of the country’s economy is not good. The pressure on the government is increasing every day. At present we are giving 25 per cent subsidy in energy sector, but still the internal market cannot be controlled.’According to information from the Ministry of Finance of Indonesia, the government subsidizes 502 trillion rupiah (Indonesian currency) or 34.22 million dollars in this sector every year to control the price of energy in the country. But in the 2 years of the Corona epidemic, like other developing countries in the world, Indonesia’s economy has suffered damage. Along with this, the value of the rupee has greatly decreased against the dollar.
For this reason, if the subsidy is continued according to the previous clause, then its amount has to be increased to 600 trillion rupees in the current standard of the country’s currency.
But if the subsidy is suddenly increased from 502 trillion to 100 trillion rupiah, there is a strong fear of damaging economic stability, said a source in the Indonesian government.Bahlil Lahadalia, acknowledging the matter at the press conference on Friday, said, “In the current situation, the subsidy is far from being increased – if this rate is maintained for a long time, there is a possibility of losing the economic balance.”
“For now there is no other option but to increase the price of fuel. My sincere call on behalf of the government to the people, let us unite once again to rebuild the country’s economy.
There are two types of sellers in Indonesia’s energy market – public and private. Fuel is sold at relatively low prices at government outlets due to subsidies.
Citing government sources, Reuters reported that Indonesia’s Finance Minister Sri Mulani Indravati on Thursday ordered to limit the sale of fuel at government outlets.
Meanwhile, some of the country’s economists have criticized the government’s decision to increase fuel prices. According to them, instead of reforming the economy and restoring the value of the rupee, the government has taken steps to increase the suffering of the people.
SMW
