If there is no subsidy, the price of fuel will increase by 2 times

Jakarta, CNBC Indonesia – The government has finally added an energy subsidy of Rp 380 trillion in 2022. This is to prevent the price of fuel oil (BBM), 3 kg LPG and electricity below 3000 VA from rising.

“We want to protect the community, meaning that the people cannot be relied on to take the shock of the entire increase, otherwise fuel prices will double,” said Sri Mulyani at the Ministry of Education and Culture’s Merdeka Learning event, Monday (27/6/2022).

Pertalite type of fuel can now be purchased at a price of Rp. 7,650 per liter. While Pertamax is higher, at Rp 12,500 per liter.

Sri Mulyani explained that this situation was caused by world oil prices which also doubled in a short time. Previously, it was assumed by the government and the House of Representatives (DPR) that the price of oil was US$ 65 per barrel, and now it has reached the level of US$ 120 per barrel.

Indonesia is fortunate because the prices of other commodities also rose, especially those which are mainstay exports. So there is a large amount of additional funds that can be diverted to subsidies.

“So the subsidies that electricity enjoys, come here by car, even though you reason that I use Pertamax, ma’am, Pertamax is still far below the price,” he explained.

Photo: Minister of Finance Sri Mulyani (Screenshot)
Minister of Finance Sri Mulyani (Screenshot)

With this policy, it is hoped that there will be no spike in inflation as experienced by many other countries. The economic recovery can also continue after the COVID-19 pandemic.

“Many countries are now facing tremendous pressure, political and social economy. Due to the increase in the price of oil, energy and food, it is not something that is trivial,” he concluded.

[Gambas:Video CNBC]

Next Article

Sri Mulyani Suggestions to DPR: Add Subsidies & Social Assistance, Debt Drops